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

Stretch your Social Security dollars further by avoiding these 10 states.
Updated Sept. 18, 2023
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Moving to another state may be attractive as a fresh start for the next chapter of your life, whether you retire early or wait until later.

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.

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f11photo/Adobe Minneapolis downtown skyline in Minnesota USA

Cost of living: 95.6
Tax Social Security: Yes

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


rondakimbrow/Adobe A view of Grand Junction, Colorado

Cost of living: 104.8
Tax Social Security: No

Colorado allows you to fully deduct Social Security income from your state taxes. However, depending on your income and age, the state will tax your retirement income above certain levels. 


Jim Ekstrand/Adobe hiking trail in acadia national. park

Cost of living: 110.5
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 110.5, with the national cost of living index at 100. Transportation and housing costs are above the national level in Maine.

Rhode Island

thomas/Adobe newport rose island light rhode island

Cost of living: 111.5
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 was $461,600, 8.4% higher than a year earlier, according to real estate website Redfin. 

That compares with a national median sale price of $421,714 for the same month.


SeanPavonePhoto/Adobe hartford connecticut usa

Cost of living: 114.4
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 third highest utilities contributing to the overall cost of living, which could cause issues on a fixed income.

New Hampshire

thomas/Adobe trees with orange leaves during fall in new hampshire

Cost of living: 114.6
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 second in the nation for health care costs, just behind Alaska.


Matt/Adobe brandon vermont during fall

Cost of living: 115.6
Tax Social Security: No

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 transportation, which could make it harder for you to stretch your Social Security check.


Josemaria Toscano/Adobe Portland Oregon Waterfront

Cost of living: 116.2
Tax Social Security: No

The two top expenses in the cost of living index work against you as a retiree in Oregon. Its transportation costs are in the top five most expensive in the U.S., and housing places 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.


Keith Allen/Adobe deep creek lake in western maryland

Cost of living: 120.7
Tax Social Security: No

Maryland’s cost of living is affected by high housing costs. The median sale price for a home was $422,900 in July, a 3.6% increase over a year earlier. On the other hand, the health care cost of living is 92.7, below the 100 mark for the national average.


Galyna Andrushko/Adobe lake on Alaska

Cost of living: 125.3
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.

New York

Leonid Andronov/Adobe william seward statue madison square park

Cost of living: 126.6
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.


Lux Blue/Adobe The sunset along the coast in Long Beach

Cost of living: 139.7
Tax Social Security: No

California is in the top five 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 third in the nation when it comes to housing expenses.


SeanPavonePhoto/Adobe skylines of massachusetts

Cost of living: 143.1
Tax Social Security: No

Living in Massachusetts will take extra cash from your Social Security check for housing, with the state ranking fourth overall for housing costs. The state is also in the top five 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.

District of Columbia

jonbilous/Adobe Skyline of Washington DC

Cost of living: 149.7
Tax Social Security: No

Housing can be a major factor for retirees in the nation’s capital. Washington, D.C., ranks second in the housing cost of living index, only behind Hawaii. The median sale price for a home in the District in July was $619,500 compared to a national sale price of $421,714.


Vermeulen-Perdaen/Adobe kailua islands from lanikai pillboxes trail

Cost of living: 181.5
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 $713,800 in July compared to the national median of $421,714.

Bottom line

WavebreakMediaMicro/Adobe stressed senior couple reviewing bills

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.

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Author Details

Jenny Cohen Jenny Cohen is a freelance writer who has covered a bit of everything, from finance to sports to her favorite TV shows. Her work has been featured in The Wall Street Journal, USA Today, and FoxSports.com.

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