Retirement benefits from Social Security aren’t all that high on a nominal basis. The program isn’t designed to make seniors rich. In fact, there’s a monthly maximum benefit of $2,788 at full retirement age in 2018. As of March 2018, SSA data shows that the average retirement benefit was $1,409.91 a month, or about $16,919 a year. Though this average benefit is above the federal poverty level for a single taxpayer of $12,140, it doesn’t exceed it by much.
But when examined on a state-by-state basis, some of the 50 states offer a considerably higher average monthly Social Security retirement benefit. According to data released by the SSA in April 2018, the following 10 currently sport the highest average monthly retirement payout:
- New Jersey: $1,553.63
- Connecticut: $1,546.67
- Delaware: $1,517.11
- New Hampshire: $1,498.01
- Michigan: $1,493.77
- Maryland: $1,482.87
- Washington: $1,472.50
- Indiana: $1,464.61
- New York: $1,458.19
- Minnesota: $1,457.22
The average New Jersey retiree is taking home $1,725 extra per year over the national average, and just over $2,900 more a year than the average retired worker in Louisiana, which ranked dead last among the 50 states ($1,311.72 a month).
Why such a variance in average retirement benefits from Social Security? Lifetime earnings is probably the single greatest differentiating factor on this list. If folks in these states are earning more than the national average, we should expect them to have a higher monthly benefit when they retire.
There are two other factors that might play a role, here, but there’s no way to quantify to what extent they’ve helped shaped the results above. The first of those would be the desire of workers to move to a new state when they retire. Michigan and Indiana may be benefiting from an influx of seniors looking to take advantage of lower-than-average expenses. The other wild card is the claiming age of retired workers. Social Security benefits can begin at age 62, or any point thereafter. The average claiming age might vary notably across the country, impacting the average benefit of retirees by state.
Long story short: Moving to New Jersey doesn’t necessarily mean you’ll be sitting pretty when claiming Social Security benefits. However, having a well-paying job and waiting a while after you’re eligible to sign up for benefits may do the trick.
You can read the full article at The Motley Fool.