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5 Startling States That Rely on Social Security the Most

Across the nation, millions of Americans rely on Social Security to give them the retirement income they need. But as it turns out, some states are much more dependent on Social Security than others, with a greater proportion of their populations receiving benefits from the federal government to supplement their incomes. Moreover, those states aren't the ones that come to mind when you think of retirement havens, with popular destinations like California, Texas, Arizona, and Nevada coming in below the national average.

The Social Security Administration provides figures every year on where Social Security recipients live. Let's look at the five states with the highest percentage of their residents as of December 2012 collecting old age, survivors, and disability insurance under Social Security.


Source: U.S. Mint.

5. Vermont, 21.7%
Vermont has a relatively small population at just 626,000, and among its 98,000 residents who are age 65 or older, 95.8% receive Social Security benefits in some form. The state's independent member of Congress, Sen. Bernie Sanders, has been a vocal proponent of defending Social Security benefits and other social programs, citing Social Security as having been "enormously successful in cutting the rate of senior poverty." Sanders has suggested raising wage caps on Social Security taxes to include higher-income levels as a solution to the program's financial issues.

4. Alabama, 22%
Alabama claims almost 700,000 residents who are 65 or older, with 92.6% of them taking Social Security benefits. The state was in the spotlight recently as employees at the Washington County Sheriff's office faced allegations of Social Security fraud, with one worker admitting to having understated job earnings on Social Security forms in order to maximize the amount of benefits he could receive at the same time. Alabama doesn't have a monopoly on fraud over Social Security benefits, however, which has become an increasingly large problem recently.

3. Arkansas, 22.3%
Arkansas has a lot of similarities with Alabama in its Social Security demographics, with a slightly smaller population but a similar percentage of people 65 or older claiming benefits. Social Security has become a big issue in the coming Senate race in the state, with current Sen. Mark Pryor accusing rival and current House Rep. Tom Cotton of voting to cut Social Security earlier this year. The hot-button issue is especially important to Arkansans who would be affected by a rise in the full-retirement age and other proposed changes.

2. Maine, 23.7%
Maine seems like an unlikely choice for retirees to live. But among its 1.33 million residents, 226,000 are above age 65, and 93.6% of them receiving Social Security benefits. Recent figures from the Center on Budget and Policy Priorities show that Maine would see senior-citizen poverty rates jump by 36 percentage points without Social Security, a more than fivefold increase from the current 8% poverty rate. The study shows that proposals to change the way cost-of-living increases are calculated could hit Maine Social Security recipients especially hard.

1. West Virginia, 24.6%
Another low-population state, West Virginia tops the list with almost a quarter of its 1.86 million residents claiming Social Security, including 91.5% of its 312,000 residents above age 65. The state has also had its share of controversy, with a retired Social Security administrative judge facing accusations of collaborating with a lawyer to grant improper disability benefits to more than 1,800 applicants from 2006 to 2010. A report showed that the lawyer involved received more than $4.5 million in attorneys' fees from the Social Security Administration, making him the third-highest-paid disability lawyer in the country.

Be smart about Social Security
Nationwide, about 18.1% of Americans receive Social Security benefits under the Old Age, Survivors, and Disability Insurance program. But whenever you hear about potential changes to Social Security benefits, keep in mind that residents in these five states could get hurt worst of all.

Get a handle on your Social Security
Meanwhile, no matter where you live, it's important to make sure that you're getting as much as you possibly can from the Social Security benefits that you've earned throughout your career. In our brand-new free report, "Make Social Security Work Harder for You," our retirement experts give their insight on making the key decisions that will help ensure a more comfortable retirement for you and your family. Click here to get your copy today.

Tune in to Fool.com for Dan's regular columns on retirement, investing, and personal finance. You can follow him on Twitter: @DanCaplinger.


Read/Post Comments (19) | Recommend This Article (24)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 24, 2013, at 9:43 AM, SeanHannity666 wrote:

    Social Securtity is communism! The lazy elderly and disabled should get jobs to support themselves or die like God wants them to. So what if your grandmother is in an oxygen tent, she can still work the drive-through at McDonalds and stop being a leech on us hard working millionaires! God Bless Fox News!

  • Report this Comment On November 24, 2013, at 10:20 AM, jasjfarrell wrote:

    Since people pay social security taxes and employers match that amount retires are entitled to social security payments. Fraud and mismanagement probably accounts for huge losses each year. That should be the first thing to be addressed. The second should be to not allow the politicians to "borrow" from the social security trust fund. When young, people should be instructed in financial management of their personal finances to use social security as a supplement to retirement income not the sole source of income.

  • Report this Comment On November 24, 2013, at 10:34 AM, ugo wrote:

    The talking point that they paid into it, so they are entitled to it is laughable.They paid taxes, and that money was redistributed to others while they were working. Now they feel entitled to the same government benefit for the sole reason they paid taxes. It is a wealth redistribution scam. Your money does not go into a savings account for you to draw on later. It goes to people drawing government benefits. SS beneficiaries are no different than welfare or food stamp beneficiaries. Chances are they too, "paid into the system" through taxes at some time in their lives too.

  • Report this Comment On November 24, 2013, at 10:34 AM, WGBinDC wrote:

    Yo, get your facts straight. Mark Pryor is NOT a Republican!

  • Report this Comment On November 24, 2013, at 11:01 AM, clutch1958 wrote:

    SeanHannity666 sounds like another person that believes the wisdom emanating from the lowest ranking cable news networks-CNN and MSNBC.

  • Report this Comment On November 24, 2013, at 11:16 AM, cowlick2 wrote:

    People paid into this fund for many years and are entitled to receive the benefit in retirement. The only problem with the system is all the fraud (try visiting a SS office and you'll find all young people there) and the face that the feds raided the funds. It is utter bs what has happened to our money. No one should have one penny without paying into the fund and that would solve much of the fraud along with monitoring disability claims.

  • Report this Comment On November 24, 2013, at 12:37 PM, TerrifiedCitizen wrote:

    Let's see...

    Loyal workers who paid into a system that works overtime to try and prevent them from discovering that politicians mismanaged their tax money and misused the money for unecessary pork-barrel projects have to make a decision.

    Stay in one of the few areas of the nation that still has a few jobs and higher cost real estate and living costs in general, or move to an area with unemployment where you can live more cheaply...

    This is common sense and not really worthy of this article or a lengthy decision.

    The real issue is to fix the SS problem and control Washington's fanatical over-spending.

  • Report this Comment On November 24, 2013, at 2:34 PM, merlin349 wrote:

    FIRST OF ALL IN THE BEGAINING THEIR WERE NO 401K THEIR WAS ONLY SOCIAL SECURITY. IF THE GOVERNMENT EMPLOYEES HAD TO LIVE ON SOCIAL SECURITY AND MEDICARE WHEN THEY RETIRED BOTH PROGRAMS WOULD BE WAY IMPROVED. THEY DON'T MAKE SOCIAL SECURITY PAYMENTS, WE PAY FOR THEIR PENSIONS WHEN THEY RETIRE THEY ARE PAID 85% OF THE AMOUNT OF MONEY THEY WERE MAKING WHEN THEY WERE WORKING.THEY DON'T NEED AND ADDITIONAL 401K RETIREMENT FUND. THEIR MEDICAL PROGRAM WHICH WE ALSO PAY FOR IS THE BEST YOU COULD ASK FOR, THEY DON'T NEED TO BUY A SUPPLEMENTAL PLAN LIKE MOST AMERICANS HAVE TO BUY. WE ARE GETTING SCREWED, THEY RETIRE AT AGE 50/55 WE RETIRE AT AGE 66 SOON TO BE CHANGED TO AGE 70.

  • Report this Comment On November 24, 2013, at 3:04 PM, carmeno wrote:

    Well Seanhahaha, it is quite obvious you never worked a day in your entire life, since you never heard of payroll tax. Don't worry you are not going to be a burden on millionaires since you don't qualify. One thing for sure, you are funny. Since I'm supposed to be respectful here, I'm not going to say what I think of UGHo. Except, sorry baby, I still have all those letters the people from the Social Security Administration sent me telling me exactly HOW MUCH I paid in and HOW MUCH my former employers paid into MY account, plus how much I was going to receive from MY account. Wonder why they stopped sending those letters. I guess I have evidence, you don't.

    As to the article, I'm still waiting to find out what is the startling fact, since it's never been a secret that those states have low income and a high percentage of senior citizens.

  • Report this Comment On November 24, 2013, at 4:35 PM, mothra85 wrote:

    Everyone keeps harping on The Social Security Trust fund. If in such bad shape why did Obama raid it of over $700 billion to fund Obamacare. Johnson and Nixon were the first president to Raid this fun theirs was to fight the Vietnam War. then Reagan raid it in the 80's to pay for his humongous Tax cuts. Pay all this back plus the interest and this Social Security Trust fund would be solvent for another 100 years . also stop paying SS to people that have been dead for over 25 years or to illegals

  • Report this Comment On November 24, 2013, at 5:09 PM, lm1b2 wrote:

    I would like to know how that lawyer in W. Virginia practice fraud all these years without the Federal Governments knowledge ?I can just imagine how many other Thieving Lawyers are out there doing the same thing !

  • Report this Comment On November 24, 2013, at 5:39 PM, toray99 wrote:

    You're right , I have all my letters from SS admin. too. How come I haven't gotten any in the last couple years???

    Anybody know the answer to that ?

    Obama going to screw us on SS too !

  • Report this Comment On November 24, 2013, at 7:27 PM, Cheri1962 wrote:

    carmeno and toray99 - the reason you're no longer receiving those letters in the mail is because your social security account is now online! Log into your account and you'll be able to see all the information you used to get in a letter.

  • Report this Comment On November 24, 2013, at 10:35 PM, Turtleskater wrote:

    The State of West Virginia does tax your Social Security Benefits.

  • Report this Comment On November 25, 2013, at 1:52 PM, TXObjectivist75 wrote:

    mothra 85, the $700 B for Obamacare came out of the Medicare budget, not the illusory SS Trust Fund.

  • Report this Comment On November 26, 2013, at 6:30 PM, SkepikI wrote:

    <mothra 85, the $700 B for Obamacare came out of the Medicare budget, not the illusory SS Trust Fund.>

    Somehow previous commentary failed to appear. It makes me ever so much more comfortable to see $700 Billion that we don't have and have to borrow came out of the left pocket instead of the right....

  • Report this Comment On November 27, 2013, at 12:25 PM, dliles wrote:

    I'd rather handle my own money.

    http://www.youtube.com/watch?v=SB0Syl3ZEx0

  • Report this Comment On November 28, 2013, at 9:05 PM, DJDynamicNC wrote:

    " It is a wealth redistribution scam. Your money does not go into a savings account for you to draw on later. It goes to people drawing government benefits. SS beneficiaries are no different than welfare or food stamp beneficiaries. Chances are they too, "paid into the system" through taxes at some time in their lives too."

    This word "scam"... I do not think it means what you think it means.

  • Report this Comment On November 29, 2013, at 11:59 AM, SkepikI wrote:

    "SS beneficiaries are no different than welfare or food stamp beneficiaries. Chances are they too, "paid into the system" through taxes at some time in their lives too."

    If by no different you mean that they take out far more than they put in, I can buy that. If you mean that they are hosed by the sponsor/custodian with low value "returns" (I use the term loosely) and pitiful value for the pay in, I can buy that. BUT if as you imply, you mean that the average welfare or food stamp sponge paid into the system at any time in their life, I believe the statistics collected by the sponsor, your US government, shows that all too often these beneficiaries never paid in a dime. Majority? hmmm maybe not, but the myth that Food Stamps or SNAP or whatever new term used is a bridge over unexpected hard times for otherwise productive people has been shown to be a myth many times. Same for Welfare.

    Then there are the real scams, fraud, rings of crooks collecting and selling cards, fake cards, reselling goods for cash to get drugs and alcohol. Perhaps DJDynamicHC will rethink....these programs are riddled with scams and scammers....

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Dan Caplinger
TMFGalagan

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on Fool.com. With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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