Here are 10 states where your Social Security benefits stretch the most

How Far Does Social Security Really Go?

Social Security is designed to provide retirees with approximately 40% of their former income from their working years.

The actual purchasing power of Social Security varies by state, but the national average is close to that 40% benchmark.

In Kansas, retirees benefit the most, with Social Security covering about 45% of typical annual expenses for seniors. On the other end of the spectrum, Hawaii offers the least support, with benefits only accounting for 21% of retirement costs.

Across the U.S., Social Security covers around 38% of expenses on average, explained Josh Koebert, the researcher behind a recent report. “In roughly half the states, it meets or exceeds the 40% target.”

The analysis found that in 24 states, Social Security benefits pay for at least 40% of annual living costs.

Many Retirees Relocate After Leaving the Workforce

Nearly 40% of Americans move to a new residence upon retiring, according to the Transamerica Center for Retirement Studies. Downsizing is a common motivation.

One way to stretch retirement dollars is to settle in a state with a lower cost of living. As Koebert notes, “Work and earn in a high-paying area, then relocate somewhere with more affordable retirement expenses.”

However, migration patterns don’t always reflect a rush to the cheapest states. In 2024, Massachusetts topped the list of retirement destinations, according to a report, despite its reputation for higher taxes and living costs.

Other popular states for retirees include Florida, Illinois, and Kentucky, which tend to have more moderate expenses.

Unsurprisingly, the study found that Social Security offers less support in states like Hawaii, Massachusetts, and California, all of which have higher living costs.

The research used data from the Department of Labor’s Consumer Expenditure Surveys and the Social Security Administration to estimate retirement expenses and benefits.

States Where Social Security Provides the Most Coverage

These 10 states offer retirees the greatest purchasing power from their Social Security benefits:

• Kansas: Annual expenses: $54,961; Average Social Security: $24,603; Coverage: 44.8%
• Oklahoma: Annual expenses: $52,179; Social Security: $23,020; Coverage: 44.1%
• Indiana: Annual expenses: $56,012; Social Security: $24,388; Coverage: 43.5%
• Minnesota: Annual expenses: $58,238; Social Security: $25,065; Coverage: 43%
• Iowa: Annual expenses: $55,827; Social Security: $23,867; Coverage: 42.8%
• Nebraska: Annual expenses: $56,630; Social Security: $24,053; Coverage: 42.5%
• Alabama: Annual expenses: $54,343; Social Security: $22,962; Coverage: 42.3%
• Missouri: Annual expenses: $55,023; Social Security: $23,235; Coverage: 42.2%
• Michigan: Annual expenses: $58,547; Social Security: $24,705; Coverage: 42.2%
• Tennessee: Annual expenses: $55,827; Social Security: $23,458; Coverage: 42%

States Where Social Security Covers the Least

These 10 states offer the lowest percentage of expenses covered by Social Security:

• Hawaii: Annual expenses: $111,097; Social Security: $23,634; Coverage: 21.3%
• Massachusetts: Annual expenses: $93,230; Social Security: $24,742; Coverage: 26.5%
• California: Annual expenses: $84,513; Social Security: $22,861; Coverage: 27.1%
• District of Columbia: Annual expenses: $83,585; Social Security: $23,865; Coverage: 28.6%
• Alaska: Annual expenses: $78,949; Social Security: $22,858; Coverage: 29%
• New York: Annual expenses: $78,269; Social Security: $23,880; Coverage: 30.5%
• Maine: Annual expenses: $70,602; Social Security: $22,554; Coverage: 31.9%
• Montana: Annual expenses: $67,882; Social Security: $22,624; Coverage: 33.3%
• Oregon: Annual expenses: $69,119; Social Security: $23,800; Coverage: 34.4%
• Vermont: Annual expenses: $70,293; Social Security: $24,346; Coverage: 34.6%

Choosing the Best Place to Retire

States where Social Security offers less support are typically those with higher living expenses, and some—like Alaska and Hawaii—are also more isolated.

Conversely, states where benefits go further often feature a combination of cities and large rural areas with lower costs, according to Koebert.

But cost isn’t the only factor. As Matthew Spiegel, a finance professor at Yale, points out, retirees should think about where they truly want to spend their time. For example, while rural Florida may be cheaper than Manhattan, frequent trips to New York for cultural events can quickly add up, making the move less economical than it appears.

Originally published by USA TODAY: 10 states where Social Security dollars go furthest in retirement