Social Security payments vary widely across the United States. While some retirees receive over $24,000 per year, others settle for much less. This difference isn’t due to where they live but stems from personal factors like work history and earnings. However, certain states report higher average payments due to the income levels of their residents. If you’re curious whether you live in a state with the highest Social Security benefits, here’s what you need to know.
Payments by State
Although where you live doesn’t directly influence how much Social Security you receive, the average payment varies by state due to the earnings history of residents. States with higher average incomes naturally tend to have higher Social Security payments.
As of December 2022, the states where retirees receive the highest average Social Security checks include:
- Connecticut
- New Jersey
- Delaware
- New Hampshire
- Maryland
- Washington
- Minnesota
- Michigan
- Massachusetts
- Utah
It’s important to remember that even in these states, individual payments vary. Factors like when you retire and your work history play a much bigger role in determining your benefit than your location.
Benefits
Your Social Security benefits are based on your lifetime earnings and the rules set by the Social Security Administration (SSA). Here’s how it works:
- Earnings History: Social Security looks at your highest 35 years of earnings, adjusted for inflation. If you have fewer than 35 years of work history, zeros will be factored into your benefit calculation, reducing the overall amount.
- Retirement Age: The age you start claiming benefits also matters. You can start receiving Social Security at 62, but your monthly payments will be reduced. Waiting until your Full Retirement Age (FRA)—which is between 66 and 67 for most people—or delaying until age 70 can significantly increase your monthly payments.
- Inflation Adjustments: Your benefits are adjusted for inflation through annual Cost of Living Adjustments (COLA), ensuring your payments keep pace with rising prices.
Payments
The states with the highest average payments are typically those with higher-income residents, leading to larger Social Security checks. However, this doesn’t mean moving to one of these states will result in higher payments for you, as your earnings history and retirement age are far more critical in determining your benefit.
Maximize Your Benefits
Regardless of where you live, there are strategies you can use to maximize your Social Security payments:
1. Work at Least 35 Years
The SSA calculates your benefits based on your highest 35 years of earnings. If you work fewer than 35 years, zeros are included in your average, which can lower your monthly benefit. Working at least 35 years ensures that these zeros don’t drag down your payment. If you work more than 35 years, your higher-earning years will replace your lower-earning ones, potentially boosting your Social Security checks.
2. Increase Your Earnings
The more you earn during your working years (up to a taxable limit), the higher your Social Security payments will be. For 2024, the maximum amount of earnings subject to Social Security taxes is $168,600. While income over this amount won’t increase your Social Security payments, raising your taxable earnings during your career will lead to larger checks in retirement.
States with higher household incomes—such as those listed above—tend to have higher average Social Security payments, but earning more wherever you live will always benefit your future benefits.
3. Choose the Right Age to Claim
The age at which you claim Social Security dramatically impacts your payments. If you claim before your Full Retirement Age (FRA), your benefits will be permanently reduced—up to 30% if you start collecting at age 62. Conversely, delaying benefits past your FRA increases your payment. By waiting until age 70, you can receive up to 32% more per month than if you started at your FRA.
4. Consider Life Expectancy
Deciding when to claim Social Security should factor in your life expectancy and current financial situation. If you’re in good health and can afford to wait, delaying your claim can result in a significantly larger monthly check. However, if you need the money sooner or have health concerns, claiming earlier might make sense.
While certain states report higher average Social Security payments, where you live isn’t the deciding factor in the size of your checks. The most effective way to maximize your benefits is by focusing on your work history, boosting your earnings, and choosing the right time to claim benefits.
By working at least 35 years, maximizing your taxable income, and delaying your claim when possible, you can ensure you receive the highest Social Security payments available to you. Geographic location may influence averages, but your personal financial strategy plays the most crucial role in your retirement income.
FAQs
Do Social Security payments differ by state?
No, Social Security benefits are based on personal factors like your work history and earnings, not your location.
Which states have the highest Social Security payments?
Connecticut, New Jersey, Delaware, and Maryland are among the states with the highest average Social Security payments.
Can moving to a higher-paying state increase my Social Security benefits?
No, moving to a different state won’t affect your Social Security payments. They are based on your earnings and the age you claim benefits.
How can I increase my Social Security payments?
Working at least 35 years, increasing your earnings, and delaying your claim until age 70 can maximize your Social Security payments.
What’s the best age to start claiming Social Security benefits?
For the highest monthly benefit, it’s best to wait until age 70. However, your financial situation and health should guide your decision.
