Best states for Social Security retirees: Social Security was made to replace about 40% of a worker’s income after retirement. A new study shows this goal is still mostly possible today. Where a retiree lives plays a very big role in how far that money goes. A FinanceBuzz study compared average Social Security checks with the yearly cost of living for seniors in every state. It found that across the country, benefits cover about 38% of retirement expenses.
Some states perform better than others. Kansas ranked at the top. In Kansas, the average Social Security payment covers nearly 45% of retirement costs. Oklahoma, Indiana, Minnesota, and Iowa also scored high. These states benefit from lower housing prices and cheaper healthcare. In total, 24 states met or passed the 40% target. Most of these states sit in the Midwest and parts of the South, where daily living costs stay lower than the national average.
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Why Retirees Choose to Move?
Many Americans move when they retire. The Transamerica Center for Retirement Studies says nearly two-fifths of people change locations after leaving work. People often want smaller homes, lower bills, and better use of fixed income like Social Security. One popular idea is to work in a state with high pay and then move to a cheaper state later.
A FinanceBuzz researcher explained this thinking clearly. “Live and work in a place where you get paid a lot and can contribute a lot, and then move to a place where there’s a lower cost of retirement,” Josh Koebert said.
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Even with this logic, many retirees still pick expensive states. Massachusetts topped AARP’s 2024 list of best retirement places. Florida, Illinois, and Kentucky also ranked high. These states often have higher taxes or living costs.
FinanceBuzz found that Social Security works the worst in high-cost states. Hawaii ranked last. There, Social Security covers only a little over 21% of yearly retirement expenses. Massachusetts, California, and Washington, D.C, all fell below 30%. In these places, high costs for housing, food, and transport eat up much of a retiree’s income. The study used spending data from the Department of Labor and payment data from the Social Security Administration to compare states fairly.
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States where benefits stretch further often mix small cities with large rural areas. This keeps prices lower. Expensive states usually pack jobs, services, and demand into big cities. Yale finance professor Matthew Spiegel said retirees should think about lifestyle too.
“Housing in rural Florida costs less than in Manhattan,” Spiegel said. “But if our hypothetical retiree wants to attend Broadway shows and Knicks games regularly, the frequent flights from rural Florida to Manhattan will quickly become costly in terms of time and money.”
