10 States Where Social Security Covers the Smallest Share of Living Expenses

For many retirees, Social Security income doesn't stretch nearly as far as they expect. In fact, benefits from the program don't even cover half of annual expenses in any state, according to a recent FinanceBuzz study.

However, as the Social Security Administration (SSA) points out, Social Security benefits were never intended to be anyone's sole source of retirement income. Still, many people rely heavily on the program to make ends meet, making it crucial to choose a retirement location you can afford — and avoid the ones you can't.

Here are the 10 states where Social Security covers the least.

Vermont

In Vermont, someone who is 65 or older can expect to rack up annual expenses of $70,293.

Meanwhile, the average annual Social Security payment for folks in this age group is $24,346, an amount that covers just 34.6% of annual expenses.

Vermont has high property taxes, and residents in the state face both high housing costs and expensive bills to heat those homes during the harsh winter months.

Oregon

Seniors in Oregon may struggle to make ends meet on Social Security, as expenses for those who are 65 and older total $69,119 each year.

The average annual Social Security payment in that age group is $23,800, which covers 34.4% of annual expenses.

Oregon has high housing costs, and Medicare expenses are among the highest in the nation.

Montana

In Montana, annual expenses for those who are 65 or older average $67,882.

Meanwhile, the average yearly Social Security payment for people that age is $22,624, enough to finance just 33.3% of annual expenses.

In recent years, both property taxes and homeowners insurance premiums have soared in Big Sky Country.

Maine

Life can be surprisingly expensive for seniors in Maine, with annual expenses for those who are 65 and older adding up to $70,602.

The average annual Social Security benefit for folks that age is $22,554. That's only enough money to pay for 31.9% of annual expenses.

The cost of living in Maine is higher than average, especially for health care, housing, taxes, and transportation.

New York

New York can be an expensive place to live, as seniors 65 and older who live in the state know: Their average annual expenses are $78,269.

The average annual Social Security benefit for folks that age is $23,880, enough to pay for 30.5% of annual expenses.

New York already has among the highest taxes in the nation, and housing is expensive in many parts of the state.

Alaska

You can travel all the way to Alaska, but you still won't escape high senior-living expenses. Those who are 65 or older can expect to incur annual expenses of $78,949. At $22,858 a year, the average Social Security benefit for people that age covers only about 29% of expenses.

In a remote state like Alaska, where everyday costs run higher, that gap can be especially challenging for those on a fixed income.

District of Columbia

Although not officially a state, the District of Columbia is home to more than 700,000 residents. Those who are 65 and older can expect annual expenses to total $83,585, while the average annual Social Security benefit for people that age is just $23,865, covering only 28.6% of the bills.

Furthermore, the cost of living is much higher in the District of Columbia than elsewhere, with housing being especially expensive.

California

In California, retirement comes with a steep price tag: adults 65 and older face average yearly costs of $84,513. With the typical Social Security benefit totaling $22,861, that income covers barely more than a quarter of those expenses (27.1% to be exact).

Retirees also need to consider that housing is extremely costly in California, and the state has very high taxes, with income taxes topping out at 13.3%.

Massachusetts

For Massachusetts seniors 65 and up, yearly living costs average $93,230. The average Social Security benefit of $24,742 offsets only 26.5% of those expenses.

Taxes are high in Massachusetts, and housing — both for those who own and those who rent — is extremely expensive.

Hawaii

It's probably no surprise to find Hawaii topping this list. The islands are a notoriously expensive place to live, with annual expenses for those who are 65 or older topping six figures, at a whopping $111,097.

The average yearly Social Security payment for those who are 65 or older is $23,634, covering a mere 21.3% of those expenses.

Taxes are also comparatively high in Hawaii. And as with Alaska, the remoteness of the state makes many everyday basics more expensive.

Bottom line

Millions of people have learned a tough lesson as they have reached their 60s and discovered Social Security falls far short of their needs.

Whether you are retired today or plan to stop working soon, now is the time to make the types of smart money moves for seniors that can result in a comfortable, stress-free retirement.

Look for ways to eliminate debt, fortify savings, and trim spending so you have a brighter financial future in your golden years.

You May Also Like

Almost 80% of Americans Fear a Retirement Age Increase — Here’s the Real Reason Why

Read More

10 Smart Money Moves to Retire

Read More

The Easiest Way to Diversify Your Investment Portfolio With Fine Art

Read More

7 Brilliant Ways to Build Wealth After 40

Read More

5 Ways Seniors Are Throwing Away Money

Read More

Best High-Yield Savings Accounts of February 2026: Earn Up to 4.21% APY

Grow your savings faster with these high-yield savings accounts

Read More

Have $150K+ in Assets? See If You Can Retire Early

Zoe Financial Benefits

• Get matched with vetted and fiduciary-certified financial advisors
• Take the mystery out of retirement planning
• Their matching tool is free

Find an advisor

Paid Non-Client Promotion

FinanceBuzz doesn’t invest its money with this provider, but they are our referral partner. We get paid by them only if you click to them from our website and take a qualifying action (for example, opening an account.)

---

Subscribe Today

Unlock the Best Banking Deals and Bonuses

From high-yield savings accounts to cashback checking and sign-up bonuses, we bring you the best banking offers to grow your money smarter.

or

SEE TOP BANKING OFFERS →

By submitting this form you agree to receive emails from FinanceBuzz and to the privacy policy and terms

Author Details

Chris Kissell

Chris Kissell is a writer and FinanceBuzz editor whose work has been featured at U.S. News & World Report, Forbes, MSN Money, Fox Business, Yahoo Finance, Bankrate, Money Talks News, and more. He writes mainly about personal finance, insurance, and health issues.