As of June 2023, the typical retired person in the U.S. received a monthly Social Security income of $1,837.29, amounting to just over $22,000 annually. Although this isn’t a hefty monthly sum, it’s a crucial income source for 80% to 90% of retirees who rely on it for their monthly expenses, according to Gallup polls over the past 20 years or so.
Interestingly, the average Social Security benefit for retirees can fluctuate greatly based on the state in which they reside. It’s important to note that these significant variations in average Social Security benefits across states aren’t due to any irregularities. Similarly, the four elements determining Social Security payment—work history, earnings history, full retirement age, and claiming age—are consistent for all retirees, regardless of their state of residence.
Top 10 States with Higher Social Security Checks for Retired Workers
The same calculation is used for all retirees, and cost-of-living adjustments (COLA) apply to every eligible beneficiary. For instance, in 2023, the 66 million-plus Social Security recipients experienced the most substantial COLA in 41 years—8.7%. Consequently, the average retiree saw a $146 increase in their monthly Social Security payment. This 8.7% boost was granted to everyone, irrespective of their state, whether they’re a retired worker, a beneficiary survivor, or a disabled worker.
Despite this, the 2022 Annual Statistical Supplement of Social Security, offering in-depth geographic analysis of retired-worker benefit disbursements in December 2021, indicates a noticeable difference in average benefits among some states. The following are the top 10 states with the highest average Social Security checks for retired workers in 2021:
- New Jersey: $1,835.28 (as of December 2021)
- Connecticut: $1,833.40
- Delaware: $1,809.53
- New Hampshire: $1,802.21
- Maryland: $1,773.91
Comparing Social Security Payouts and Understanding the Factors Behind State Variations
For comparison, the average monthly payout for retired workers in December 2021, including the 2022 COLA of 5.9%, was $1,658.03. This means a typical retired worker in New Jersey received $177.25 more per month, or an additional $2,127 annually, compared to the national average.
The figures mentioned above exclude the record-breaking 8.7% COLA given in 2023. If it were included, retirees in New Jersey and Connecticut would likely average around $2,000 in monthly benefits.
What Factors Account for Higher Payouts in Certain States?
Why is there such a discrepancy in average Social Security payouts among retirees from different states? The likely explanation revolves around income. Work history and earnings history, two of the four primary factors that determine a retiree’s monthly Social Security benefit, are often higher in states with above-average wages. Hence, workers with higher lifetime earnings would likely receive larger Social Security checks.
As per 2022 data, excluding Washington, D.C., states like Connecticut ($84,792), Massachusetts ($84,945), New Jersey ($78,700), Washington ($75,698), New Hampshire ($74,663), Maryland ($70,730), and Minnesota ($68,010) had per capita incomes significantly higher than the national average of $63,442.
Additionally, workers with higher incomes may have greater capacity to save or invest for their future. If they begin growing their retirement funds early, they might be able to delay claiming their Social Security benefits.