Dec 17, 2019
If you're retired and collecting Social Security, the program's already meager benefits can be extra puny depending on the state you live in.
Social Security beneficiaries in some states will receive as much as $3,000 less from the program during 2020 than those living elsewhere, a Moneywise.com analysis finds.
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We used the most current data from the Social Security Administration to calculate the average monthly and annual payments retirees can expect to collect in each state next year. Our study factors in the 1.6% cost-of-living raise that will take effect on Jan. 1.
Where retirees will get the most — and least
Average benefits will be smallest in Louisiana during 2020.
Social Security beneficiaries in New Jersey will receive the highest amounts from the retirement system in 2020, averaging about $20,264 during the year. In lowest-ranking Louisiana, Social Security recipients are likely to get just $17,077, on average.
Moneywise finds these are the 10 states where retirees stand to collect the most from Social Security in the new year.
| State | Avg. monthly | Avg. annual |
|---|---|---|
| 1. New Jersey | $1,688.66 | $20,263.92 |
| 2. Connecticut | $1,683.52 | $20,202.24 |
| 3. Delaware | $1,654.54 | $19,854.48 |
| 4. New Hampshire | $1,683.52 | $19,629.84 |
| 5. Michigan | $1,620.13 | $19,441.56 |
| 6. Maryland | $1,617.70 | $19,412.40 |
| 7. Washington | $1,604.23 | $19,250.76 |
| 8. Indiana | $1,589.86 | $19,078.32 |
| 9. Minnesota | $1,589.07 | $19,068.84 |
| 10. Pennsylvania | $1,582.80 | $18,993.60 |
But in these 10 states, Social Security recipients can expect the lowest average amounts next year.
| State | Avg. monthly | Avg. annual |
|---|---|---|
| 1. Louisiana | $1,423.08 | $17,076.96 |
| 2. Mississippi | $1,430.12 | $17,161.44 |
| 3. Maine | $1,432.06 | $17,184.72 |
| 4. New Mexico | $1,439.43 | $17,273.16 |
| 5. Montana | $1,448.33 | $17,379.96 |
| 6. Arkansas | $1,448.48 | $17,381.76 |
| 7. Kentucky | $1,455.24 | $17,462.88 |
| 8. South Dakota | $1,458.26 | $17,499.12 |
| 9. Alaska | $1,462.96 | $17,555.52 |
| 10. North Dakota | $1,466.45 | $17,597.40 |
See our complete ranking of the states, going from the smallest 2020 benefits to the largest.
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What will the typical retiree receive in 2020?
Retired workers on Social Security will receive $1,503 per month, on average, during 2020.
The Social Security Administration estimates that the 1.6% COLA — or cost of living adjustment — will give the average retired U.S. worker $24 more per month in 2020: $1,503, up from $1,479 in 2019.
That means annual payments for retirees next year will average $18,036.
Our study finds benefits will be below average in 20 states and the District of Columbia. They'll be above the national average in the other 30 states.
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The 1.6% COLA is the smallest in three years. Retirees got a more generous 2.8% raise from Social Security in 2019.
The COLA is meant to keep up with inflation and is set based on increases in consumer prices.
What determines Social Security amounts?
You'll collect more Social Security by delaying your retirement.
Social Security benefits are based on retirees' earnings during their working years, specifically during the 35 years when they made the most money.
Benefit amounts also are affected by timing: Retired workers who choose to start taking Social Security at the earliest possible age — 62 — receive much less than those who wait until their mid-60s or even until age 70.
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It's reasonable to conclude that smaller average benefit amounts are found in states with lower overall incomes and economic pressures that cause seniors to pull the trigger on Social Security at earlier ages.
Being patient and delaying your claim for benefits is one way to get the most from Social Security. Here are a few others:
- Move to a state that won't tax your benefits. Thirteen states do tax Social Security.
- Set up a my Social Security account on the agency's website and check for errors in your earnings information.
- Claim dependents in retirement, especially if you're caring for grandchildren.
- Seek survivors benefits if you lose your spouse.
Read more in our article on how to maximize your Social Security benefits.
Read More: Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
Our methodology
We calculated each state's average benefits for 2020 using recently released Social Security Administration data from 2018.
We divided the total benefits paid to retired workers in each state by the number of retired beneficiaries per state to find the average benefit paid to retirees in every state during 2018.
To those results, we added 2.8% — to determine the average benefit per state in 2019, accounting for the 2.8% COLA.
After doing those calculations, we added another 1.6% — for the 2020 COLA — to find each state's likely average benefit next year.
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Doug Whiteman was formerly the editor-in-chief of MoneyWise. He has been quoted by The Wall Street Journal, USA Today and CNBC.com and has been interviewed on Fox Business, CBS Radio and the syndicated TV show "First Business."
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