Social Security isn’t supposed to be the only source of income you have in retirement, it’s actually meant to replace about 40% of the income you earned in your working life. Of course, that’s just an average and how far that money stretches depends on how much the cost of living is for retirees, so location plays a huge part. A new study from FinanceBuzz crunches the numbers to find out how far Social Security goes in each state.
- The research finds that the 40% figure isn’t too far off, as across the country, the payments cover an average of 38% of expenses for recipients.
- Social Security benefits cover at least 40% of annual living expenses in 24 states, according to the study.
- Finding a state with a lower cost of living can make a big difference in how far those payments go, and Kansas tops the list of where they go the furthest. Social Security payments cover roughly 45% of living expenses for seniors there.
- On the flip side, they cover the least in Hawaii, just 21% of retirement expenses.
- Massachusetts, California, Washington, D.C., and Alaska round out the top five states where Social Security stretches thinnest.
The 10 States Where Social Security Goes Furthest
- Kansas - 44.8% of annual expenses covered
- Oklahoma - 44.1% of annual expenses covered
- Indiana - 43.5% of annual expenses covered
- Minnesota - 43% of annual expenses covered
- Iowa - 42.8% of annual expenses covered
- Nebraska - 42.5% of annual expenses covered
- Alabama - 42.3% of annual expenses covered
- Missouri - 42.2% of annual expenses covered
- Michigan - 42.2% of annual expenses covered
- Tennessee - 42% of annual expenses covered⠀
Source: USA Today