Tens of millions of Americans rely on Social Security benefits to pay their bills and put food on the table, but new research found that residents of some states are far more dependent on the monthly benefits than others.
A new study from FinanceBuzz analyzed data from the Social Security Administration and U.S. Census Bureau to determine which states’ senior citizens rely on Social Security benefits the most and least.
To determine a state’s reliance on Social Security benefits, researchers first identified the median annual income for residents ages 65 and up in each state.
They then looked at the average annual Social Security income for residents ages 65 and up in each state to determine what percentage of their income stemmed from Social Security benefits.
Mississippi was found to be the most reliant on Social Security of any state, with benefits accounting for nearly half, 49.5%, of the median income for residents ages 65 and up.
West Virginia ranked as a close second, with Social Security benefits accounting for 49% of seniors’ income in the state.
Kentucky, Indiana and Arkansas rounded out the top five with Social Security accounting for 47.6%, 46.4% and 46.1% of senior’s income, respectively.
On the other end of the spectrum, Hawaii was found to be the state least reliant on Social Security, with benefits making up just 25.9% of the median income for residents ages 65 and up.
Alaska ranked second, with Social Security benefits accounting for 30.8% of seniors’ income in the state.
“The cost of living in Hawaii and Alaska is among the highest in the country, so anyone hoping to retire in those states will likely need more than just Social Security income to live comfortably,” the report notes.
California, Maryland and Washington D.C. ranked third, fourth and fifth, respectively, with benefits accounting for 31.9%, 33.8% and 33.8% of the median income for seniors.
Higher benefits on the way
Each year, Social Security benefits and Supplemental Security Income payments are subject to an annual cost-of-living adjustment based on inflation rates to ensure that monthly payments keep pace with rising costs.
In October, the Social Security Administration announced that beneficiaries will see a 2.8% increase for 2026.
Those who receive Social Security benefits will start seeing higher payments in January, while those receiving Supplemental Security Income saw them starting Dec. 31.
Cost-of-living adjustments are determined using third-quarter data – July, August and September – from the Consumer Price Index for Urban Wage Earners and Clerical Workers.
Inflation for those three months is added together, averaged and then compared to the previous year’s third-quarter average, with the percentage difference between the current year and the previous year serving as the COLA rate for the upcoming year.