Here are 10 states where Social Security dollars go furthest

Social Security is meant to replace about 40% of the income you earned in your working life.

A new report from FinanceBuzz sets out to measure how far Social Security actually goes in every state. And as it turns out, that 40% figure isn’t far off.

Social Security goes the furthest in Kansas, where the average annual payment covers roughly 45% of living expenses for seniors, according to the personal finance site.

And Social Security covers the least in Hawaii, where the average annual payment covers just 21% of retirement expenses.

“Across the country, we found that it covers about 38% of expenses,” on average, said Josh Koebert, FinanceBuzz researcher and author of the Dec. 23 report. “In about half the country, it meets that 40% standard that they’re shooting for.”

The analysis found that Social Security benefits cover at least 40% of annual living expenses in 24 states.

Nearly two-fifths of Americans move to a new home when they retire, according to the Transamerica Center for Retirement Studies. Often, the goal is to downsize.

One way to economize in retirement is to find a state with a lower cost of living.

“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,” Koebert said.

Curiously, data on where retirees actually move doesn’t show a massive migration to cheap states. The top retirement destination in 2024 was Massachusetts, a state once known as Taxachusetts, according to a report from AARP.

Other top retirement destinations include Florida, Illinois and Kentucky, all with more moderate living costs.

Not surprisingly, the FinanceBuzz report finds that a Social Security check doesn’t go all that far in Hawaii, Massachusetts or California, all states with relatively high costs of living.

The analysis calculates retirement expenses based on the Department of Labor’s Consumer Expenditure Surveys, among other sources. Social Security data comes from the Social Security Administration.

Here are the 10 states where Social Security goes the furthest:

1. Kansas. Annual retirement expenses: $54,961. Average annual Social Security payment: $24,603. Annual expenses covered by Social Security: 44.8%.

2. Oklahoma. Annual expenses: $52,179. Social Security payment: $23,020. Social Security covers 44.1% of expenses.

3. Indiana. Annual expenses: $56,012. Social Security payment: $24,388. Social Security covers 43.5%.

4. Minnesota. Annual expenses: $58,238. Social Security payment: $25,065. Social Security covers 43%.

5. Iowa. Annual expenses: $55,827. Social Security payment: $23,867. Social Security covers 42.8%.

6. Nebraska. Annual expenses: $56,630. Social Security payment: $24,053. Social Security covers 42.5%.

7. Alabama. Annual expenses: $54,343. Social Security payment: $22,962. Social Security covers 42.3%.

8. Missouri. Annual expenses: $55,023. Social Security payment: $23,235. Social security covers 42.2%.

9. Michigan. Annual expenses: $58,547. Social Security payment: $24,705. Social Security covers 42.2%.

10. Tennessee. Annual expenses: $55,827. Social Security payment: $23,458. Social Security covers 42%.

And here are the 10 states where Social Security covers the least:

1. Hawaii. Annual retirement expenses: $111,097. Average Social Security payment: $23,634. Expenses covered by Social Security: 21.3%.

2. Massachusetts. Annual retirement expenses: $93,230. Average Social Security payment: $24,742. Expenses covered by Social Security: 26.5%.

3. California. Annual retirement expenses: $84,513. Average Social Security payment: $22,861. Expenses covered by Social Security: 27.1%.

4. District of Columbia. Annual retirement expenses: $83,585. Average Social Security payment: $23,865. Expenses covered by Social Security: 28.6%.

5. Alaska. Annual retirement expenses: $78,949. Average Social Security payment: $22,858. Expenses covered by Social Security: 29%.

6. New York. Annual retirement expenses: $78,269. Average Social Security payment: $23,880. Expenses covered by Social Security: 30.5%.

7. Maine. Annual retirement expenses: $70,602. Average Social Security payment: $22,554. Expenses covered by Social Security: 31.9%.

8. Montana. Annual retirement expenses: $67,882. Average Social Security payment: $22,624. Expenses covered by Social Security: 33.3%.

9. Oregon. Annual retirement expenses: $69,119. Average Social Security payment: $23,800. Expenses covered by Social Security: 34.4%.

10. Vermont. Annual retirement expenses: $70,293. Average Social Security payment: $24,346. Expenses covered by Social Security: 34.6%.

The states where Social Security coverage stretches thin are generally places with higher costs of living. Some, like Alaska and Hawaii, are relatively remote.

States where Social Security goes further tend to have a mix of urban centers and “huge rural areas” with lower living costs, Koebert said.

Living costs aside, retirees should consider where they want to actually spend time in retirement before they commit to a move, said Matthew Spiegel, a finance professor at Yale University.

“Housing in rural Florida costs less than in Manhattan,” Spiegel said, speaking in the report. “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. Now that rural house is not so cheap.”

This article originally appeared on USA TODAY: 10 states where Social Security dollars go furthest in retirement