As of June 2023, the average retired worker was receiving $1,837.29 each month from Social Security, or a little over $22,000 on an annualized basis. While this isn't a particularly large monthly payout, it's necessary income that between 80% and 90% of retirees lean on to cover some portion of their monthly expenses, based on what more than two decades of surveys from national pollster Gallup tells us.
Yet what you might be surprised to learn is that the average Social Security monthly benefit paid to retired workers can vary dramatically based on which state they call home.
Image source: Getty Images.
Average Social Security retired worker checks are bigger in these 10 states
To be perfectly clear, there are no shenanigans that have created these wide gaps in what an average beneficiary in one state brings home compared to another state. The same benefit calculation is applied to all retired workers, just as the cost-of-living adjustment (COLA) is passed along to every qualified beneficiary.
For example, Social Security's more than 66 million beneficiaries received the largest COLA, on a percentage basis (8.7%), in 41 years in 2023. The average retired worker saw their monthly Social Security check rise by $146. This 8.7% increase was given across the board, regardless of the state you live in, or whether you're a retired worker, survivor receiving benefits, or worker with disabilities.
Likewise, the four factors that determine how much you'll be paid by the Social Security Administration are universal for retired workers -- work history, earnings history, full retirement age, and claiming age -- regardless of the state they live in.
Nevertheless, Social Security's 2022 Annual Statistical Supplement, which provides detailed geographical breakdowns of retired-worker benefit disbursements in December 2021, shows a marked difference in average retired worker benefits for certain states. What follows are the 10 states where average retired worker Social Security checks were the highest 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
- Washington: $1,752.09
- Michigan: $1,746.65
- Minnesota: $1,741.07
- Massachusetts: $1,729.36
- Kansas: $1,721.62
For context, the average monthly payout for retired workers in December 2021, which factored in the 2022 COLA of 5.9%, was $1,658.03. This means the typical retired worker in New Jersey brought home $177.25 per month, or $2,127 when annualized for the full year, more than the national average.
Note, the above figures don't include the historically high 8.7% cost-of-living adjustment beneficiaries received in 2023. If they did, retired workers in New Jersey and Connecticut would likely be averaging around $2,000 per month in benefits.
Image source: Getty Images.
Why are retired workers bringing home so much more in some states than others?
The question is, why do these large gaps in average Social Security retired worker payouts exist in the first place? The answer, more than likely, relates to income.
As noted, work history and earnings history are two of the four key factors that determine how much a retired worker will receive each month from Social Security. If a worker generates an above-average wage or salary for the 35 inflation-adjusted years the Social Security Administration takes into account, the expectation would be for a beefier Social Security check.
In terms of average income per capita in 2022, excluding Washington, D.C., Connecticut ($84,792), Massachusetts ($84,945), New Jersey ($78,700), Washington ($75,698), New Hampshire ($74,663), Maryland ($70,730), and Minnesota ($68,010) were all well above the national average of $63,442. Connecticut, Massachusetts, New Jersey, Washington, and New Hampshire, respectively rank Nos. 1, 2, 3, 5, and 7 in the country.
To add to this point, workers generating more earned income than the national average may be able to save more of their money or invest it for their future. If a worker is able to get a head start on building up their retirement fund, they may be able to wait longer before claiming their Social Security benefit.
| Birth Year | Age 62 | Age 63 | Age 64 | Age 65 | Age 66 | Age 67 | Age 68 | Age 69 | Age 70 |
| 1943-1954 | 75% | 80% | 86.7% | 93.3% | 100% | 108% | 116% | 124% | 132% |
| 1955 | 74.2% | 79.2% | 85.6% | 92.2% | 98.9% | 106.7% | 114.7% | 122.7% | 130.7% |
| 1956 | 73.3% | 78.3% | 84.4% | 91.1% | 97.8% | 105.3% | 113.3% | 121.3% | 129.3% |
| 1957 | 72.5% | 77.5% | 83.3% | 90% | 96.7% | 104% | 112% | 120% | 128% |
| 1958 | 71.7% | 76.7% | 82.2% | 88.9% | 95.6% | 102.7% | 110.7% | 118.7% | 126.7% |
| 1959 | 70.8% | 75.8% | 81.1% | 87.8% | 94.4% | 101.3% | 109.3% | 117.3% | 125.3% |
| 1960 or later | 70% | 75% | 80% | 86.7% | 93.3% | 100% | 108% | 116% | 124% |
Data source: Social Security Administration.
Claiming age can have a very big impact on how much you'll receive each month from Social Security. For every year you hold off on taking your payout, beginning at age 62, your benefit can grow by as much as 8%, through age 69.
As you can see from the table above, your claiming decision can lead to a permanent reduction in monthly benefits of as much as 30%, or potentially increase what you'd have received at full retirement age by 24% to 32%, if taken at age 70. Retired workers in the 10 states with the biggest benefit checks may, as a whole, be waiting longer to begin taking their payout.
Lastly, cost of living may be playing a role. Although Social Security income is vital to the financial well-being of most seniors, an average of $22,000 per year won't stretch very far in high-cost states. Kansas, for example, has the third-lowest cost of living in the country (12.3% below the national average). Michigan (7.3% below the national average) and Minnesota (5.9% below the national average) are also options for beneficiaries looking to stretch their Social Security dollars during retirement. High earners relocating to Kansas and Michigan may explain why those two are among the 10 states where retired workers are receiving the largest Social Security checks.
