Yahoo Finance Avoid These 10 States If You’re Living on Just a Social Security Check
Social Security is an important component of the American retirement system, providing about 30% of the income of the elderly, according to the Social Security Administration. But for those living in high-cost states, this percentage is much less. In other words, if you live or plan to live in an expensive state during retirement, you’ll need much more outside income than the average $1,781.63 monthly Social Security check to cover your costs.
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To find out which are the 10 worst states to live on a Social Security check, GOBankingRates analyzed data on rental rates for a one-bedroom apartment and the overall cost of living from a variety of sources, including the Social Security Administration, the 2022 Missouri Economic Research and Information Center’s Cost-of-living data series and ApartmentList’s February 2023 data.
The most expensive states, as determined from the data, are listed here in reverse order. Perhaps not surprisingly, the bulk of the states on the list are in coastal areas.
Florida
2022 average 1-bedroom rent: $1,411
Cost-of-living index: 102.8
Florida ranks pretty well on its overall cost-of-living index, but high rents push it into the more unaffordable category for those living on just a Social Security check.
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Washington
2022 average 1-bedroom rent: $1,300
Cost-of-living index: 114.2
Costs jump up to more than 14% above the national average in Washington, making it more unaffordable for many retirees. However, lower-than-expected rents can make living on a limited income more manageable.
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Connecticut
2022 average 1-bedroom rent: $1,278
Cost-of-living index: 116.8
Connecticut has a fairly high cost of living overall, and it’s famous for its high property taxes. However, if you’re a renter, things look a bit better, as Connecticut has the lowest average one-bedroom rent of any state in the top-10-most-unaffordable list.
New Hampshire
2022 average 1-bedroom rent: $1,312
Cost-of-living index: 116.1
New Hampshire is another state with a relatively low average one-bedroom rent compared to its fairly high cost of living. Although overall costs might be overwhelming for those living on Social Security, renters have a better go of it if they can trim their other expenses.
New Jersey
2022 average 1-bedroom rent: $1,498
Cost-of-living index: 112.4
Costs in New Jersey are high, especially when it comes to real estate taxes, which are the highest in the country. One-bedroom rents are also high, so there’s no place to hide when it comes to living in New Jersey on just Social Security.
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Maryland
2022 average 1-bedroom rent: $1,401
Cost-of-living index: 124.0
Rents are high in Maryland but additional costs also take a dramatic jump, running 24% above the national average. This makes the overall cost of living in Maryland nearly twice as high as in New Jersey, relative to the national average.
Massachusetts
2022 average 1-bedroom rent: $1,395
Cost-of-living index: 149.7
The cost-of-living index in Massachusetts is actually the second-highest in the country, behind only outlier Hawaii. However, its one-bedroom rents are actually surprisingly affordable on a relative basis, helping keep the state a notch or two below the most expensive states.
New York
2022 average 1-bedroom rent: $1,614
Cost-of-living index: 134.5
New York lives up to its reputation as one of the most expensive states in the country, and it’s tough to rely primarily on Social Security to make it there. But New York is a big and diverse state, and there are plenty of areas away from Manhattan and other more expensive areas that can help your money stretch a bit further.
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California
2022 average 1-bedroom rent: $1,626
Cost-of-living index: 137.6
California is the most expensive state in the continental U.S. for those trying to live off a Social Security check. But just like in New York, if you can get away from the big cities like San Francisco and Los Angeles, you can find your costs drop dramatically in areas like the Central Valley.
Hawaii
2022 average 1-bedroom rent: $1,772
Cost-of-living index: 184.0
Hawaii’s overall cost of living is simply off the chart. The state’s COL index of 184 makes it more than twice as expensive (relative to the average) as the No. 2 state on the list, California. Hawaii’s average one-bedroom rent is the most expensive in the nation.
Methodology: GOBankingRates determined the worst states to live on only a Social Security check based on the (1) average monthly benefit for retired workers, $1,781.63, sourced from Social Security Administration; (2) the overall cost of living in each city, sourced from the Missouri Economic Research and Information Center’s 2022 Cost of Living data series ; and (3) the average 2023 rent for a one bedroom apartment as sourced from ApartmentList’s February 2023 data. Factors (2) and (3) were scored and combined with the highest score being the worst. All data was collected and is up to date as of April 3, 2023.
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This article originally appeared on GOBankingRates.com: Avoid These 10 States If You’re Living on Just a Social Security Check
