Millions of Americans head into retirement, counting on Social Security as their main (or only) source of income. In many parts of the country, that monthly check can stretch far enough to live comfortably. But in others, it barely makes a dent.
A few financial and real estate professionals weighed in on which states are the toughest for retirees living on Social Security. Their answers are worth knowing before you pack any boxes.
Hawaii: Beautiful, But Brutally Expensive
Hawaii tops the list for Elias Friedman, CFP, and founder of Kadima Wealth. He calls it a “double whammy”, high housing costs and high food costs, because most food has to be imported to the islands.
Sain Rhodes, a real estate expert at Clever Offers, puts it in plain numbers. The cost of living in Hawaii exceeds the national average by 90 percent. A gallon of milk can run up to $8. The median rent for a one-bedroom apartment runs as high as $2,200 a month.
That leaves little room in a Social Security budget for anything else.
California: Stunning Views, Steep Costs
California lands near the top of Rhodes’ list, too. Median rents run around $2,500 a month. Even a modest home can carry roughly $6,000 a year in real estate taxes.
Friedman does offer one practical workaround for Californians who want to stay put. Get a roommate. He says the idea has shed its old stigma, and for people on a fixed income, sharing housing costs can make a real difference. It also helps with something many retirees miss: daily companionship.
New York: High Costs and a Tax Bite Too
New York rounds out the tough-three list. Ben Mizes, president of Clever Real Estate, says the state is difficult for retirees because housing, food, and services all carry high price tags.
Rhodes adds another layer: New York taxes Social Security benefits once your income crosses a certain threshold. That extra hit makes it harder to stretch your check, even for higher earners.
Where Social Security Goes Further
Here is the good news. Rhodes says there are plenty of places where a Social Security income can go a long way. He points to these five states as solid options:
- Mississippi
- West Virginia
- Arkansas
- Alabama
- Oklahoma
These states share a few key advantages: low property taxes, little or no state tax on Social Security payments, and monthly rents below $1,000 in many towns.
Rhodes also highlights Tennessee as a strong pick. The state has no income tax, reasonable property taxes, and four mild seasons, which, he notes, matter for staying active and healthy in retirement.
Where you spend your retirement is one of the most personal decisions you will ever make. But knowing which states work with your Social Security (and which ones work against it) is a smart place to start.