51. Louisiana
When Social Security was established in 1935, American life expectancy over age 65 was approximately 13 years. With advancements in medicine, that life expectancy has risen by almost 54%, to nearly 20 years. These longer life spans have brought the challenge of paying more money out over longer periods. The Social Security Administration (SSA) estimates 64 million Americans have received Social Security benefits in 2021.
The SSA responded by incentivizing maximum monthly benefit amounts for individuals who wait longer to retire. A 62-year-old retiree received up to the maximum monthly benefit of $2,324 in 2021. However, an American who waits until 70 to retire can receive up to the maximum monthly amount of $3,895.
But did you know that the average monthly payment can vary widely, based on the cost of living in the state you choose to retire in? This is how all 50 states, plus the District of Columbia, rank in terms of Social Security payments. Some people might be on the move…
50. Mississippi
Average annual benefit: $16,350
In 2018, 540,818 Pelican State retirees collected average monthly benefits of $1,362.52. Tax-friendly Louisiana exempts benefits from state income tax and offers deductions to offset taxes on other retirement income.
Property taxes rank low comparatively. Homestead exemptions and senior citizen assessment freezes reduce it further. The state sales rate is very low at 4.45%, but localities raise the average to the nation’s third-highest.
49. Maine
Average annual benefit: $16,431
In the Magnolia State, 416,530 retirees averaged $1,369.26 monthly. Benefits, retirement income, estates, and inheritances are not taxable. Property taxes are very low, made even lower by homestead exemptions.
Therefore, Mississippi very tax-friendly for retirees. Taxes are a high consideration for seniors on Social Security. Benefits account for at least 90% of income for nearly half of unmarried and about 1 in 5 married seniors.
48. New Mexico
Average annual benefit: $16,453
Social Security says 234,929 retired workers in the Pine Tree State collected average monthly benefits of $1,371.12. Benefits are not taxable, but retirement income tax is 7.15%. Maine is not tax-friendly for retirees.
Property taxes are higher than the national average, with possible homestead exemption available. Sales tax is low at 5.5% with no local rate hikes, but groceries and medicines are exempted. There are also estate taxes.
47. Montana
Average annual benefit: $16,538
In the Land of Enchantment, 297,313 retirees averaged $1,378.17 monthly. New Mexico is moderately tax-friendly. Benefits and other retirement income are taxable, but some tax deductions are available.
Most of the state has fairly low property taxes, and retirees may reduce them further by freezing their primary home’s assessed value. While there’s no state sales tax, businesses charged the gross receipts tax raise prices.
46. Arkansas
Average annual benefit: $16,640
Officials say 171,787 Treasure State retirees received Social Security payments that averaged $1,386.69 monthly. Benefits and most retirement income are taxable. But Montana is still moderately tax-friendly for retirees.
The state has no sales, estate, or inheritance taxes. And already fairly low property taxes may be reduced by the homestead exemption. There is also a property tax credit available to some seniors based on income.
45. Kentucky
Average annual benefit: $16,642
In the Natural State, 439,558 retirees collected average monthly benefits of $1,386.84. Tax-friendly Arkansas does not tax benefits, and retirement income is only partially taxed with offered deductions.
Homestead exemptions may further reduce low property taxes. While sales tax is very high, a 9.53% state average, medicines are exempt. Grocery taxes are 0.125%. There’s no inheritance or estate taxes, but capital gains are taxed.
44. South Dakota
Average annual benefit: $16,720
In the Bluegrass State, 599,606 retirees averaged $1,393.31 monthly. Benefits are not taxable, and retirement income deductions are available for seniors. The fairly tax-friendly state has low property and sales taxes.
Homestead exemptions are available, and groceries and medicines are exempt from sales tax. However, capital gains are taxed as normal income by the state, and the inheritance tax is fully exempted only by direct relatives.
43. Alaska
Average annual benefit: $16,754
The Social Security Administration says 133,040 retired workers in the Mount Rushmore State averaged $1,396.20 monthly. No state income tax means benefits are not taxable. There’s no inheritance or estate taxes either.
State sales tax is 4.5%, but localities can double that, averaging 6.4%. Higher than average property taxes can be offset by homestead exemptions and additional reductions for seniors. Overall, South Dakota is very tax-friendly.
42. North Dakota
Average annual benefit: $16,808
Officials say 72,029 retirees in the Last Frontier collected average monthly benefits of $1,400.70. Alaska is very tax-friendly to retirees (and everyone else) with no state income, state sales, estate, or inheritance taxes.
Localities can levy sales tax, but the state average is 1.76%. Many cities provide homestead exemptions, but this is not statewide. Additionally, resident homeowners receive annuities from the Alaska Permanent Fund of oil revenues.
41. District of Columbia
Average annual benefit: $16,849
In the Peace Garden State, 96,657 retirees collected average monthly benefits of $1,404. Benefits, retirement account income, and pension income are taxable. Homestead credit exemptions reduce already low property taxes.
State sales tax is 5%, but localities can add up to 3.5% more, making the average 6.94%. Groceries, medicines, and medical equipment are exempted. There is no inheritance tax, and the estate tax is rarely assessed.
40. Oklahoma
Average annual benefit: $16,959
In the nation’s capital, 57,338 retirees collected average monthly benefits of $1,413.25. Moderately tax-friendly D.C. does not tax benefits or government pensions. However, other retirement income is fully taxable.
Property tax and sales tax averages are low (groceries and medicines exempt), but the cost of living is quite high. Estate tax exemption amounts are the lowest in the country, capped at $4 million, nearly a third of the federal cap.
39. Nevada
Average annual benefit: $17,098
In the Sooner State, 522,769 retirees collected average monthly benefits of $1,424. Tax-friendly toward retirees, benefits are exempted from taxes, and taxable retirement income has available deductions.
Home values and property taxes are fairly low. Homestead exemptions and valuation freeze from increasing taxes are available to many seniors. Sales tax is very high at an 8.95% average, and groceries are not exempt.
38. Idaho
Average annual benefit: $17,153
Benefits collected by 396,557 retirees in the Silver State averaged $1,429.46 monthly. Benefits and retirement income are not taxed. Nevada is considered very tax-friendly, with no state income, estate, or inheritance taxes.
Property taxes can be low, depending on where in the state you live. Rural areas are lower and also have a lower cost of living. Sales tax is higher than average, with a combined state and local average of 8.23%.
37. Texas
Average annual benefit: $17,158
In The Gem State, 247,610 retirees collected average monthly benefits of $1,429. Benefits are not taxed, and there are no inheritance or estate taxes. Retirement-friendly Idaho has low state and property taxes.
However, retirement and pension income are fully taxable, with senior deductions on public pensions. “Circuit Breaker” property tax reductions may provide relief. There are no inheritance or estate taxes under the federal threshold.
36. California
Average annual benefit: $17,178
In the Lone Star State, 2,832,567 retiree benefits averaged $1,431 monthly. Texas is retirement-friendly with no state income tax, estate tax, or inheritance tax. This means benefits and retirement income are not taxed.
The state does have some of the highest property and sales taxes in the nation, but housing costs are below average, and there are additional homestead exemptions available for seniors. Groceries and medicines are sales tax exempt.
35. Alabama
Average annual benefit: $17,190
In the Golden State, America’s most populous, 4,310,091 retirees collected average monthly benefits of $1,432.46. Some senior exemptions from taxes can provide some relief from the 8.68% average sales tax.
California is not tax-friendly for retirees, with some of the nation’s highest income, property, and state taxes. Still, the total number of retirees in California is greater than almost half of the other states’ entire populations.
34. Georgia
Average annual benefit: $17,222
In the Heart of Dixie, 709,443 retirees averaged $1,435.18 in monthly benefits. They aren’t taxed, but groceries aren’t exempt from the 9.22% average sales tax. Federal taxes may be deducted from state taxable income.
In 1940, Social Security comprised only 0.29% of the national budget. By the 1970s, this was over 20%. Today, it’s approximately 23% of the budget, over $1 trillion. Approximately 83% was allotted to over 45 million retired workers.
33. West Virginia
Average annual benefit: $17,241
Monthly benefits collected by 1,242,203 retirees in the Peach State averaged $1,436. Benefits are not taxed, and up to $65,000 per person can be deducted on retirement income for anyone 65 or older.
Georgia is very retirement-friendly. There is a state tax, but there are exclusions for seniors 65 and older. Property taxes are below average with homestead exemptions. Sales tax is below average statewide.
32. Ohio
Average annual benefit: $17,243
In the Mountain State, 285,909 retirees collected average monthly benefits of $1,436. The state does tax benefits, but some deductions are available for seniors. Retirees will find West Virginia tax-friendly.
Property taxes are also very low, made lower still by homestead exemptions. Sales tax is a low 6% with a few localities adding 0.5% to 1% more. Groceries and prescriptions are exempt. There are no estate or inheritance taxes.
31. Missouri
Average annual benefit: $17,266
In the Buckeye State, 1,581,420 retirees collected average monthly benefits of $1,438.86. Ohio is moderately tax-friendly for retirees, with benefits tax-exempt. While pensions and retirement accounts are taxable, credits are available.
Benefits comprise more than a third of income for seniors aged 65 or older. So, sales and property taxes over the national average may be a concern. However, there are exemptions for prescription drugs and groceries.
30. Tennessee
Average annual benefit: $17,267
In the Show-Me State, 873,524 retirees collected average monthly benefits of $1,438.96. Missouri is one of 13 states that tax benefits, but seniors who live entirely on their benefits and public pensions are fully exempt.
Moderately retirement-friendly, Missouri property taxes are slightly less than average, and there are credits available for some senior citizens. However, sales tax is higher than the national average and higher still in some localities.
29. Hawaii
Average annual benefit: $17,401
In the Volunteer State, 964,035 retirees collected average monthly benefits of $1,450.11. Tennessee does not tax retirement income or benefits. Senior homeowners may find additional relief on the already low property taxes.
Tennessee has one of the highest sales taxes. Groceries are not exempt, taxed at 4%, but prescription drugs are exempt. There are no inheritance or estate taxes. There is a state income tax on interest and dividends.
28. Florida
Average annual benefit: $17,420
In the Aloha State, 211,813 retirees averaged benefits of $1,452 monthly. Estate taxes exempt under $5.49 million in assets. A general excise tax of about 6%, instead of sales tax, is usually passed to consumers via higher prices.
Hawaii has the highest cost of living, it nearly doubles the national average. However, retirees on Social Security and small retirement accounts may find the state more tax-friendly as these benefits are not taxable.
27. North Carolina
Average annual benefit: $17,420
The Sunshine State’s 3,389,540 retirees averaged $1,452.43 in monthly benefits. Considered America’s retirement capital, Florida is very tax-friendly to retired workers. There are no state income, estate, or inheritance taxes.
Homeowners aged 65 or over with their principal residence in Florida may qualify for an additional homestead exemption up to $50,000. And some counties offer full home value exemptions based on income.
26. Oregon
Average annual benefit: $17,550
In the Tar Heel State, 1,476,848 retirees averaged $1,462.49 monthly. Benefits are not taxed, but the retirement income flat-tax is 5.25%. Moderately retirement-friendly without estate or inheritance taxes and a 6.97% sales tax average.
Benefits are paid to a surviving child until they reach age 18. But did you know that there is a maximum family benefit? If your benefits exceed an established limit, your spouse or dependent children will receive less.
25. Iowa
Average annual benefit: $17,576
In The Beaver State, 640,652 retirees average monthly benefits of $1,464.65, which are not taxed. There are also no state or inheritance taxes. However, a high cost of living makes the state only moderately retirement-friendly.
Did you know Social Security has a point system? Points earn at about four per year of employment. Retired workers must have 40 points, or at least six in the last 13 calendar quarters, to receive benefits.
24. Nebraska
Average annual benefit: $17,614
In the Hawkeye State, 470,664 retirees collected average monthly benefits of $1,467.82. Benefits are not taxed, and there are deductions for other retirement income. The state is only moderately retirement-friendly due to higher-than-average property taxes.
Sales tax is 6%, plus up to 1% by localities. Residents deduct federal taxes from state taxable income. Inheritance tax is exempted for immediate family, as well as lineal ascendants and descendants. There is no estate tax.
23. Colorado
Average annual benefit: $17,620
Monthly benefits for 250,014 retirees from the Cornhusker State averaged $1,468.36. Nebraska levies retirement income and benefits. High taxes juxtapose lower living costs, making it one of the least retirement-friendly states.
State sales tax is 5.5%, medicine and groceries exempt. But local rates can add up to 2.5% to the sales tax, averaging 6.93%. There are also inheritance taxes and some of the country’s highest property taxes to consider.
22. South Carolina
Average annual benefit: $17,657
In 2018, 639,282 Centennial State retirees’ monthly benefits averaged $1,471.42. Although Colorado taxes benefits, the state is still considered retirement-friendly. Seniors 55 and older can each deduct $20,000 or more from retirement income, possibly eliminating those taxes. Colorado’s property taxes are some of the lowest in America. The marginal state tax is 4.63%, but there are no estate or inheritance taxes.
21. Vermont
Average annual benefit: $17,712
In the Palmetto State, 796,032 retirees collected average benefits of $1,475.98 a month. No state taxes are assessed on Social Security benefits. The state also offers a tax deduction of $15,000 for any other type of retirement income.
Sales tax is 6%, but localities add up to 3% more. However, low property taxes, 4% marginal state tax, and no inheritance or estate taxes make South Carolina one of the most retirement-friendly states.
20. Wyoming
Average annual benefit: $17,779
In the Green Mountain State, 106,070 retirees collected average monthly benefits of $1,481.62. Vermont levies taxes on benefits, as well as retirement and pension income. Therefore, the state is not considered retirement-friendly.
Ida May Fuller of Rutland was the first person to receive Social Security benefits. Her January 1940 check was for $22.54. Allowing for inflation, that’s about $425 of purchasing power.
19. Illinois
Average annual benefit: $17,822
In the sparsely-populated Equality State, 82,101 retirees collected $1,485.18 in average monthly benefits. Benefits are not taxed in Wyoming. And there are no estate or inheritance taxes.
The state is considered retirement-friendly, as there are also no state taxes, and property taxes rank near the bottom for the United States. Sales tax is 4%, but municipalities can tack on up to 2% more.
18. Arizona
Average annual benefit: $17,896
In The Prairie State, 1,590,343 retirees collected an average of $1,491.30 in monthly benefits. Illinois does not tax benefits or pension and retirement account income. Tax-friendly towards retirees, but property taxes are high.
State taxes are 6.25%, but localities can increase this by up to 10% more. Prescription and non-prescription drugs and food are taxed at 1% statewide. State income taxes are flat-rated at 4.95% after adjustments. There is no inheritance tax, and the estate tax, capped at 16%, has a $4 million exemption.
17. Rhode Island
Average annual benefit: $17,897
In The Grand Canyon State, 992,575 retirees collected average monthly benefits of $1,491.45. Benefits are not taxed, but retirement income is, making the state only moderately retirement-friendly. Sales tax averages 8.4%.
Lifelock CEO Todd Davis learned a hard lesson about identity theft. In a 2006 publicity stunt, Davis publicly posted his own Social Security number. It backfired terribly when identity thieves successfully used his number.
16. Utah
Average annual benefit: $17,920
In The Ocean State, 156,598 retirees collected average monthly benefits of $1,493.31. Rhode Island taxes benefits and retirement income. The state is not considered retirement-friendly, with taxes higher than the national average.
Computer hackers became adept at guessing Social Security numbers with very few pieces of information. If you were born after 2011, your social security number is far more secure because it is randomized.
15. Wisconsin
Average annual benefit: $18,009
In The Beehive State, 284,754 retirees collected average monthly benefits of $1,500.79. Utah levies state taxes on Social Security benefits. Only moderately retirement-friendly, the cost-of-living is balanced between some high and low taxes.
If you were born before 2011, your social security’s first three numbers indicate the issuing office’s zip code. Like zip codes, these numbers increase from east to west across the United States.
14. Virginia
Average annual benefit: $18,024
In The Badger State, 896,146 retirees collected average monthly benefits of $1,502.04. The state does not tax Social Security. Wisconsin is considered moderately retirement-friendly with no estate or inheritance taxes.
However, retirement income is subject to taxes, and property taxes are very high. There is a marginal state tax rate of 5.9%. State income taxes range from 3.86% to 7.65% based on taxable income.
13. Massachusetts
Average annual benefit: $18,084
In The Old Dominion State, 1,078,144 retirees collected average monthly benefits of $1,507.01. Virginia doesn’t tax benefits and is tax-friendly for retirees, especially the up-to-$12,000 exemption on other retirement income.
Sales tax is 5.3% by the state, with additional local taxes in some areas. Groceries are statewide taxed at 2.5%. There are no inheritance or estate taxes. State income taxes range from 2% to 5.75%, based on taxable income.
12. Kansas
Average annual benefit: $18,104
In The Bay State, 878,840 retirees collected average monthly benefits of $1,508.65. The state does not tax benefits, but it is moderately retirement-friendly due to fully taxed retirement income without exemptions or deductions.
Sales taxes are 6.25%, exempting most footwear and clothing under $175. There are neither local sales nor inheritance taxes. State income tax is flat-rated at 5%. Credits provide some seniors relief from property taxes.
11. New York
Average annual benefit: $18,145
In The Sunflower State, 391,286 retirees collected average monthly benefits of $1,512.09. Kansas taxes Social Security benefits. The state is moderately retirement-friendly, allowing seniors some income tax exemptions.
Did you know that a Social Security number dies with the number’s owner? The number is never issued again. This is also true of both numbers if a person is assigned a new number. The two are tied together to make sure all earnings are credited to the person.
10. Pennsylvania
Average annual benefit: $18,174
In The Empire State, 2,548,783 retirees averaged monthly benefits of $1,514.50. Benefits are not taxed. Interestingly, John Sweeney Jr. of New Rochelle received the first SS number in 1936.
Hilda Whitcher had over 40,000 people misuse her number across four decades. Her 1936 employer bolstered wallet sales using display cards with Whitcher’s Social Security Number without her permission. The Administration issued her a new number in 1943, but as late as 1977, the number was still misused.
9. Minnesota
Average annual benefit: $18,185
In The Keystone State, 1,966,422 retirees averaged monthly benefits of $1,515.44. Pennsylvania does not tax benefits and exempts retirement income for seniors aged 60 and older. The state is considered retirement-friendly.
Sales tax is 6%, but it exempts medicines, food, heating fuels, and clothing. State income tax is a flat rate of 3.07%, but localities may impose additional taxes. There is a value-percentage-based inheritance tax but no estate tax.
8. Indiana
Average annual benefit: $18,257
In The North Star State, 761,515 retirees collected average monthly benefits of $1,521.45. Minnesota is one of the 13 states that levy taxes on Social Security benefits. With higher taxes, the state is not considered retirement-friendly.
Did you know that retirees can help avoid identity theft by keeping a close eye on their credit card statements? Notification systems can send alerts via email or text message when charges have been made on your cards.
Average annual benefit: $18,266
In The Hoosier State, 921,226 retirees collected average monthly benefits of $1,522.20. Indiana does not tax Social Security benefits. Indiana is moderately tax-friendly for retirees, who may claim some deductions on property taxes.
State sales tax is 7%, exempting groceries in most areas. Indiana has a flat tax of 3.23%, but some counties levy additional taxes up to an additional 3.38%. There are no estate or inheritance taxes.
7. Washington
Average annual benefit: $18,432
In The Evergreen State, 970,010 retirees collected average monthly benefits of $1,535.96. Benefits are not taxed in Washington because there is no state income tax. Other taxes, however, are considered high.
State sales taxes are 6.5%, but municipalities can bring that up to 9.21%. Seniors may qualify for property tax exemptions. There are no state or inheritance taxes. Overall, Washington may be considered tax-friendly for retirees.
6. Maryland
Average annual benefit: $18,586
In The Old Line State, 720,910 retirees collected monthly benefits averaging $1,548.85. Maryland does not tax these benefits, but Kiplinger cautions that IRA distributions are fully taxed. State tax is 6%, and there are no local sales taxes.
Did you know that the Social Security Administration is based in Baltimore instead of Washington D.C.? It wasn’t due to lack of attempt. Two different SSA-intended buildings were reallocated to other government entities, in 1935 and again in 1941.
5. Michigan
Average annual benefit: $18,614
In The Great Lakes State, 1,498,279 retirees collected an average of $1,551.19 in monthly benefits. Michigan does not tax Social Security. Their sales tax is 6%, and they have a flat state income tax of 4.25%.
Although property taxes are regarded as high, there are homestead credits available to homeowners. Michigan is considered tax-friendly towards retirees, who can deduct some retirement income from their taxes.
4. New Hampshire
Average annual benefit: $18,794
In The Granite State, 213,708 retirees collected an average of $1,566.21 in monthly benefits. Benefits and income from retirement accounts and pensions are not taxed.
Additionally, there are no sales, inheritance, or estate taxes. Interestingly, Concord, the capital of New Hampshire, was the birthplace of the lowest Social Security number. Grace Owen was given number 001-01-0001 in 1936.
3. Delaware
Average annual benefit: $19,009
In The First State, 156,16 retirees collected average monthly benefits of $1,584.12. Delaware does not tax Social Security. There is an available deduction on income derived from retirement accounts or pensions, which are both taxable.
Kiplinger calls Delaware the “most tax-friendly” with no state sales tax or death taxes and very low property taxes. There is also a school property tax credit available for some seniors. There are no estate or inheritance taxes.
2. Connecticut
Average annual benefit: $19,343
In The Constitution State, 501,724 retirees collected an average of $1,611.88 in monthly benefits. Connecticut collects taxes on Social Security benefits. Sales tax is 6.35% statewide, and groceries are exempt.
Sales tax can be higher for certain more expensive goods like jewelry valued at over $5,000 or taxes charged for over 30-day vehicle rentals. The state has high property taxes, but seniors may qualify for a credit.
1. New Jersey
Average annual benefit: $19,402
According to the Social Security Administration, New Jersey is where retired workers collect the highest average payments. The Garden State’s 1,181,229 retirees collected average monthly benefits of $1,616.80.
Flickr.com/KristenSocial Security is not taxable. Most of the state pays 6.6% sales tax, but most footwear and clothing are exempt. Property taxes are the highest in the U.S.; therefore, New Jersey is only moderately retirement-friendly.