Avoid These 15 States if You Rely Solely on Social Security Income

As you retire early or reach your Golden Years, you may be considering moving somewhere new to start the next chapter of your life. But some places are better than others.

The Council for Community & Economic Research looks at the costs of health care, utilities, groceries, transportation, and housing to determine the cost of living index, the national average at 100.

Based on that data, here are some states you probably don't want to live in if your only retirement income is Social Security.

Cost of living: 95.3
Tax Social Security: Yes

While Minnesota has a low cost of living overall, the state's health care cost is in the top 10 of all states. 

So, it may not be a good option for retirees who need to spend a large portion of Social Security on additional health care expenses.

The state also taxes Social Security after reaching certain thresholds, which may also be a consideration for living there.

Cost of living: 102.7
Tax Social Security: Yes

While the state does tax all income, Colorado allows you to fully deduct Social Security income from your state taxes if you are 65 or older. However, depending on your income and age, the state will tax your retirement income above certain levels. 

Cost of living: 113.5
Tax Social Security: No

Transportation and housing comprise the largest part of the expenses in the cost of living index developed by the Council for Community & Economic Research.

The general cost of living in Maine is higher at 113.5, with the national cost of living index at 100. Transportation and housing costs are above the national level in Maine.

Cost of living: 111.7
Tax Social Security: Yes

Your Social Security will be taxed if it exceeds a certain limit, so keep that in mind if you only live on Social Security income. 

Connecticut also has the seventh-highest utilities contributing to the overall cost of living, which could cause issues on a fixed income.

Cost of living: 112.4
Tax Social Security: Yes

Housing is an important factor for retirees living on Social Security in Rhode Island. The median sale price for a home is $493,00, 8.2% higher than a year earlier, according to real estate website Redfin. 

That compares with a national median sale price of $429,813 for the same month.

Cost of living: 111.5
Tax Social Security: No

New Hampshire has a high cost of living that's affected by some specific costs pushing it up. The state is in the top 10 for the cost of utilities and is above the national average for housing and transportation.

Cost of living: 114.1
Tax Social Security: Yes

In addition to the high cost of living, Vermont is among the most expensive in specific areas of the cost of living index.

It's in the top 10 most expensive states for groceries, housing, utilities, and health, which could make it harder for you to stretch your Social Security check.

Couples with incomes below $65,000 and individuals with incomes below $50,000 are exempt from state income taxes on their Social Security benefits.

Cost of living: 110
Tax Social Security: No

The two top expenses in the cost of living index work against you as a retiree in Oregon. Its transportation and housing costs are in the top 10 of the most expensive states.

On the other hand, the state's cost for utilities is below the nation's 100-level benchmark.

Cost of living: 98.9
Tax Social Security: No

Maryland's cost of living is affected by high housing costs. The median sale price for a home was $430,900 in November, a 4.7% increase over a year earlier.

Cost of living: 123.4
Tax Social Security: No

New York housing costs rank fifth in the nation, which could quickly sink your Social Security income. The state also ranks in the top 10 for most expensive groceries in the United States.

Cost of living: 123.4
Tax Social Security: No

Alaska could be a beautiful state to retire in, especially if you like winter weather. But cost of living factors could eat at your Social Security deposit. 

The state ranks highest when it comes to health care costs, which could be a major expense as you get older.

Cost of living: 144.7
Tax Social Security: No

California is in the top three states with the highest cost of living, with housing being a major drag for retirees who are only living on Social Security. 

The state ranks fourth in the nation when it comes to housing expenses.

Cost of living: 146.9
Tax Social Security: No

Living in Massachusetts will take extra cash from your Social Security check for housing, with the state ranking second overall for housing costs. The state is also in the top three for its utilities and health care costs.

A long, cold winter will require more heat, and increasing health care costs may strain your fixed monthly Social Security payment as you age.

Cost of living: 138.1
Tax Social Security: No

Housing can be a major factor for retirees in the nation's capital. Washington, D.C., ranks third in the housing cost of living index, only behind Hawaii and Massachusetts. 

The median sale price for a home in the District in November was $699,000 compared to a national sale price of $429,813.

Cost of living: 184.6
Tax Social Security: No

Hawaii doesn't tax your Social Security, but that may be little solace if you're living in the state with the highest cost of living.

In addition to the general cost of living, Hawaii has the highest housing costs. The median sale price for homes in Hawaii was $759,300 in November, compared to the national median of $429,813.

If you have the ability and desire to move, understanding the actual cost of living in your desired location should be a starting point. 

If you plan to live only on Social Security income, you will need to make a realistic budget and stick to it. Most likely, you'll need to find ways to make extra money in retirement.

You could also wait to receive your Social Security benefits until age 70 to ensure you have the highest monthly income for the rest of your life.