States Where Social Security Income Stretches the Farthest (and Where It Doesn’t)

If it feels like life is getting more expensive every day, that's because it is. This is true for people of all ages, including American retirees, many of whom rely on Social Security as a significant part of their annual income.

Just how much of someone's expenses Social Security benefits actually cover can vary greatly from one state to the next, as things like the cost of living, local laws, taxes, and other factors make it so that it is easier to stretch Social Security benefits in some states versus others.

To find just how far Social Security goes across the country, FinanceBuzz evaluated government data related to annual spending and benefit payments to see where Social Security covers the highest and lowest proportion of expenses for people over the age of 65 in each state.

Key findings

• Social Security doesn't cover even half of annual expenses in any state, with coverage ranging from just 21% to 45%
• Kansas offers the best affordability, where Social Security covers 44.8% of annual costs for residents 65 and over
• Other states where benefits stretch the furthest include Oklahoma, Indiana, Minnesota, and Iowa
• Hawaii, Massachusetts, California, Washington, D.C., and Alaska are the least affordable, with Social Security covering just 21% to 29% of expenses

How much Social Security covers by state

Nowhere in the country do Social Security benefits cover even 50% of annual expenses for the average person over the age of 65.

In about half the country — 24 different states — Social Security benefits cover at least 40% of annual expenses for people of retirement age. There are eight different states where Social Security covers less than a third of expenses.

Average annual expenses for seniors (aged 65+)

According to the Bureau of Labor Statistics, the average American aged 65 or older spends a little more than $60,000 annually, though the cost of living and other factors can make that total higher or lower in different states.

More than a third of that total (36%) is spent on housing. This includes mortgage and rent payments, taxes, and general expenses related to upkeep and home ownership.

Transportation, including gas and car payments, accounts for the next-largest chunk of the budget, 15%. Healthcare and food each account for about 13% of annual spending, while insurance (such as home or auto), cash contributions (such as alimony and child support), and entertainment each account for about 5% of spending.

The states where Social Security covers the most

By adjusting the average annual expense amount based on cost-of-living data compiled by the Missouri Economic Research and Information Center, we determined how much the average person aged 65+ in each state spends annually, and then found how much of those expenses are covered by the average annual Social Security benefit in each state.

Kansas is the state where Social Security can cover the highest portion of yearly expenses, as the $24,603 in benefits that recipients get in that state equates to 44.8% of the $54,961 in average annual expenses for Kansans over the age of 65.

Oklahoma is second, as its benefits payments account for 44.1% of expenses, while Indiana is third at 43.5% of costs.

The states where Social Security covers the least

States with higher costs of living mean that average Social Security benefits cover fewer expenses. There are eight states where Social Security accounts for less than a third of what the average person aged 65+ spends in a year.

Average living expenses in Hawaii are the highest in the country, at over $110,000 annually. As a result, the average Social Security benefit of $23,634 only accounts for a little more than 20% of annual expenses, which is the lowest rate in the country.

Massachusetts is second, but benefits cover 26.5% of annual expenses in the Bay State, more than five points higher than in Hawaii. California, the District of Columbia, Alaska, New York, Maine, and Montana are the remaining states where Social Security covers a third of annual expenses or less.

Full Data

Advice from the experts

Navigating life in retirement while receiving benefits doesn't have to be confusing. To help clarify what benefit recipients should know now to plan confidently no matter where they live, FinanceBuzz reached out to a panel of experts.

Responses may have been edited for clarity and brevity.

How much does where you live affect the benefits you'll receive?

Matthew Spiegel

PROFESSOR OF FINANCE | YALE UNIVERSITY

Social security benefits only depend on your work history, not where you worked or where you live while retired. As to whether the cost of "living comfortably" during retirement varies by state, it does. But the ranking depends on what you are looking for in your retirement community.

Housing in rural Florida costs less than in Manhattan. 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. In general, you want to live where you want to spend your time. If there are a number of such places, then housing costs, taxes, and the like come into play.

Will factors like a declining birth rate and people working for longer affect Social Security funding?

Anqi Chen

ASSOCIATE DIRECTOR OF SAVINGS AND HOUSEHOLD FINANCE | CENTER FOR RETIREMENT RESEARCH, BOSTON COLLEGE

Yes. Social Security is a pay-as-you-go system, so current taxes fund current benefits. Lower birth rates, in the absence of higher immigration, means fewer workers. Fewer workers mean fewer people contributing to the system and less money to fund the benefits of current retirees.

Tamara L. Wolske, MS, MPhil, CPG, CSA, CTACC

ASSISTANT PROFESSOR EMERITA & ADJUNCT FACULTY IN AGING STUDIES | INTERPROFESSIONAL HEALTH & AGING STUDIES, CENTER FOR AGING & COMMUNITY, UNIVERSITY OF INDIANAPOLIS

The declining birth rate in the United States is a major factor affecting the long-term sustainability of Social Security. Other countries in the world serve as examples. In [some] countries, there's been a decline in GDP and financial support for social programs due to lower tax collections, ultimately attributed to lower birth rates and fewer working-age people (McKinsey Global Institute, 2025).

There are benefits to the Social Security system when older adults continue to work past the age of Social Security eligibility, but employers may not want older workers for various reasons. 

Older workers can be willing, reliable, and highly capable, adding value with their knowledge, skills, and stability. Some may want part-time hours or flexible schedules, reducing costs for employers, but this also translates into less contribution to the Social Security system from their earnings. Many individuals need remote work options because they are caregivers, which is beneficial to families and communities, but may be a barrier in the labor market. These and other factors can result in older workers accepting lower-paying jobs, reducing their contributions to Social Security.

Bottom line

With Social Security covering less than half of annual expenses in each state, those planning for retirement will need additional strategies to close the financial gap. If you're looking ahead toward retirement, here are a few steps you can take to strengthen your financial future.

• Choose the right retirement account for your goals. Understanding the differences between a Roth IRA vs. 401(k) can help you maximize tax advantages and long-term growth.
• Avoid common mistakes that can cost you in retirement. You might unknowingly make errors that compromise your retirement savings, from withdrawing too early to relying too heavily on one account type. Learn what to watch out for with our list of costly retirement mistakes so you can stay on track.
• Explore alternative ways to save for retirement. If you don't have access to a 401(k), or simply want to diversify, there are several smart options available. Check out 401(k) alternatives to find additional tools that can help you build financial security.
• Store your money wisely. If you have cash on hand, or are able to save a portion of your benefits each month, knowing the best places for your cash can help make the most of your money.

Methodology

Average annual expenses for people aged 65 and older were sourced from the Bureau of Labor Statistics' Consumer Expenditure Survey. Bureau of Labor Statistics data was from 2023, so we applied a 2.89% adjustment to account for a year's worth of inflation.

We then found cost-of-living data for 2024 published by the Missouri Economic Research and Information Center and applied cost-of-living adjustments to the average expense amount to find how much people aged 65+ spend annually in each state.

All other data were sourced from data published by the Social Security Administration. All data relates to Old-Age, Survivors, and Disability Insurance (OASDI) benefits, and we only collected data for recipients aged 65 and older. Data on payments and benefit recipients were used to calculate the average annual Social Security benefit paid in each state. All Social Security Administration data cover the most recent full year for which data is available, 2024.

We then calculated the proportion of annual expenses that can be covered by the annual Social Security benefit in each state.

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