Need That Money

Stretching Social Security Benefits: Best and Worst States for Retirees

Social Security benefits are an essential source of income for millions of retirees, disabled individuals and their families in the United States. While the program was designed to provide a safety net for those who have contributed to it, the reality is that the average monthly benefit is relatively low compared to the cost of living.

Therefore, retirees need to take proactive steps to stretch their hard-earned benefits to maximize their purchasing power. This article will provide some practical tips that can help you get more out of your Social Security benefits, as well as an overview of the cost of living in West Virginia.

How to Stretch Social Security Benefits

Where to Live

One way to stretch your Social Security benefits is by choosing an affordable place to live. Many people are under the impression that living expenses are roughly the same across the United States.

However, this is far from the truth. Depending on where you live, the cost of living can vary widely, and this includes housing, taxes, utilities, and healthcare.

According to a recent study, the average monthly benefit for retired workers in 2020 was $1,503.68 per month. In West Virginia, that same amount goes much further than in many other states.

In fact, West Virginia ranked number one among all states in the cost of necessities index, which includes the cost of rent, groceries, utilities, and healthcare.

Delaying Payments

Another way to increase your Social Security benefit payments is to delay taking them until you are older. By doing so, you can boost the size of your Social Security payout, which can be especially helpful if you plan to rely heavily on your benefits during retirement.

The longer you delay receiving payments, the higher your benefit payment will be. For example, if your full retirement age is 67, you can begin receiving benefits as early as 62, but your monthly benefit will be reduced by up to 30%.

On the other hand, if you delay payments until age 70, your benefit payment will increase by 8% per year beyond full retirement age.

West Virginia

Lowest Cost of Necessities

West Virginia is a state that provides a much lower cost of living than many other states. The average rent for a one-bedroom in a major city is $674, compared to $1,593 in New York City.

Groceries are also generally cheaper, with a half-gallon of milk coming in at an average of $1.68 compared to $2.45 in New York. In addition to these lower costs, the state has a lower tax burden than other areas.

West Virginia ranks 14th in the nation for the lowest state and local tax burden as a percentage of income. All of these factors mean that West Virginia is a great place to stretch your Social Security benefits.

Breakdown of Costs

To give a more detailed overview of the cost of living in West Virginia, here is a breakdown of some of the costs of living in the state:

Groceries: A gallon of milk costs $2.73, while a dozen eggs cost $1.45. Utilities: The average utility bill (electricity, water, and gas) is $150 per month.

Healthcare: The average cost of healthcare in West Virginia is lower than the national average. A doctor’s visit costs approximately $100-150, while the cost of an emergency room visit is around $1,500.

Conclusion

If you’re looking to stretch your Social Security benefits, choosing an affordable place to live and delaying your benefit payments can make a big difference. By living in a state like West Virginia, you can also benefit from a lower cost of necessities.

Don’t let your benefits go to waste, take proactive steps to make the most of them.

Mississippi

Social Security Coverage

Mississippi is a state with a high poverty rate and limited job opportunities, and as a result, Social Security benefits are crucial for many retirees. In 2020, the average Social Security benefit for retired workers was $1,503.68 per month.

What many people may not know is that Social Security covers more than just retirement benefits. In Mississippi, Social Security can also provide disability and survivor benefits, which can be extremely helpful for those who qualify.

Disability benefits are typically available to those who are unable to work due to a disabling condition. Mississippi has one of the highest disability rates in the country, and Social Security disability benefits can help individuals with disabilities to pay for necessities like health care, food, and housing.

Survivor benefits are designed to provide financial support to the family members of deceased workers. In Mississippi, over 440,000 people receive Social Security survivor benefits, accounting for 11.9% of the state population.

Low Costs

Mississippi is one of the most affordable states to live in, with a cost of living index of 86.1. The average rent for a one-bedroom apartment is $631, which is lower than the national average. Additionally, groceries are also cheaper in Mississippi, with a gallon of milk costing around $2.50.

Transportation costs are also relatively low, with gas prices averaging around $2.15 per gallon. Overall, Mississippi’s low costs can make a big difference in stretching your Social Security benefits.

However, it’s important to keep in mind that the state’s poverty rate means that certain necessities, like healthcare, may be more difficult to afford.

South Dakota

Low Cost of Monthly Necessities

South Dakota is another state with a low cost of living, making it an attractive option for retirees looking to stretch their Social Security benefits. In fact, South Dakota is one of the most tax-friendly states for retirees, with no income tax on Social Security benefits and no state estate tax, making it a great option for those on a fixed income.

The state has a low cost of monthly necessities, with rent averaging around $700 per month for a one-bedroom apartment. Additionally, South Dakota has one of the lowest overall costs for healthcare, with private health insurance premiums averaging around $300 per month.

Utilities and Grocery Costs

In addition to affordable housing and healthcare costs, utilities and groceries are also relatively affordable in South Dakota. The average electrical bill is around $98 per month, and natural gas averages around $78 per month.

Groceries are also cheaper in South Dakota, with a gallon of milk costing around $2.70, and a dozen eggs costing around $1.49. Transportation costs are slightly higher in South Dakota, with gas prices averaging around $2.20 per gallon.

However, compared to other states, South Dakota’s transportation costs are still relatively low. Overall, South Dakota’s low cost of monthly necessities can be a great way to stretch your Social Security benefits, especially for those looking to maintain a comfortable standard of living on a limited budget.

Conclusion

When it comes to stretching your Social Security benefits, choosing an affordable place to live can make a big difference. For those living in Mississippi or South Dakota, low costs for necessities like housing, groceries, and healthcare can help you to get more out of your benefits.

By taking these factors into consideration, you can make the most of your Social Security payouts and live comfortably on a fixed income.

New Mexico

Categories where New Mexico Ranks Well

New Mexico is a state that offers a variety of benefits for retirees, including low taxes, a warm climate, and breathtaking scenery. The state is also home to several categories where it ranks well, which can make the state an attractive destination for retirees who want to make the most of their Social Security benefits.

New Mexico is frequently recognized for its low costs of living. For instance, in 2020, Kiplinger ranked the state #9 for affordability in its analysis of tax-friendly states for retirees.

The state also ranks well for weather and natural beauty, coming in at #4 in a study by U.S. News & World Report.

In addition, New Mexico is a state that offers a rich cultural experience.

It is home to 23 Native American reservations, including the Navajo Nation, which is the largest reservation in the country. The state is also the birthplace of both turquoise and the atomic bomb and has a rich history of Spanish colonization.

This cultural heritage is reflected in the state’s food, architecture, and art and can provide retirees with new and exciting experiences.

Overall Cost

Despite these advantages, there are also factors to keep in mind when considering New Mexico as a retirement destination. While the state is known for its low costs of living, Social Security coverage is not enough to cover all additional expenses.

For example, the state’s overall cost of living index is 95.4, compared to the national index of 100. The median home price is $196,444, which is higher than the national median home price.

As such, retirees need to carefully consider their finances to ensure they can afford to live comfortably in New Mexico.

Maryland

Maryland’s High Cost of Living

Maryland is a state known for its proximity to major cities and its beaches, making it an attractive retirement destination for some. However, these perks come at a cost, with

Maryland’s overall cost of living being higher than the national average.

According to a cost-of-living analysis by NerdWallet, the state ranked #18 in affordability for retirees in 2020. Rent is one of the major costs contributing to

Maryland’s high cost of living.

According to RentCaf, the average monthly rent for a one-bedroom apartment in Baltimore, the state’s largest city, is $1,414. In comparison, the average rent for the same sized apartment in New Mexico is $763.

Healthcare

Maryland is also a state where healthcare costs are higher than average. According to a study by the Commonwealth Fund,

Maryland ranks 33rd out of 50 states for overall health system performance.

However, the state does rank high in access and affordability, coming in at #16. While the state has a number of well-regarded hospitals, including Johns Hopkins Hospital and University of

Maryland Medical Center, the cost of healthcare can still be prohibitive for some retirees.

In addition, the state’s emphasis on urban living means that specialized healthcare services may not be as easily accessible in rural areas.

Conclusion

When it comes to choosing a retirement destination, finding the right balance of affordability and amenities is key. While New Mexico offers low costs of living and a rich cultural experience,

Maryland’s higher cost of living and healthcare costs may make it harder for some retirees to stretch their Social Security benefits.

Ultimately, retirees need to weigh their priorities and carefully consider their finances to find the destination that best fits their needs and budget. Idaho

Overall Cost of Living

Idaho is a state with a lower cost of living than many other states in the U.S., making it an attractive option for retirees looking to stretch their Social Security benefits. The overall cost of living in Idaho is 92.3 out of 100, which is lower than the national average.

The median home value is $305,600, which is lower than the national median home value.

In addition to affordable housing, other costs of living are lower in Idaho as well.

The state has no sales tax on groceries, and residents also pay no inheritance tax or estate tax. Retirees will find that Idaho is one of the most tax-friendly states in the country, which can be an advantage when it comes to stretching their Social Security benefits as far as possible.

Breakdown of Costs

To give a more detailed outlook on the cost of living in Idaho, here is a breakdown of some of the costs that retirees should expect to encounter:

Transportation: The average cost of gas in Idaho is $2.68 per gallon, which is lower than the national average. Additionally, Idaho is a state where owning a car is essential, and public transportation options can be limited in certain areas.

Groceries: Idaho is a state where the cost of groceries is lower than the national average. The cost of a gallon of milk is around $2.27, and a loaf of bread costs around $2.93.

Utilities: The average electric bill is around $86 per month, and the average natural gas bill is around $51 per month. The average Internet bill is around $53 per month.

Healthcare: Idaho has a robust healthcare system, with well-regarded hospitals and medical centers across the state. However, healthcare costs can still be a challenge for retirees.

The average cost of a doctor’s visit in Idaho is around $114, and the average cost of an emergency room visit is around $1,350.

Conclusion

Overall, Idaho is a state that offers retirees a lower cost of living than many other states in the U.S. While there may be some challenges, such as limited public transportation options and healthcare costs, Idaho’s affordable housing, lack of sales tax on groceries, and tax-friendly policies make it a great option for retirees looking to make the most of their Social Security benefits. By carefully considering their finances and doing their research, retirees can find a comfortable and affordable place to live in Idaho.

In conclusion, retirees must carefully consider their living expenses to ensure that they make the most of their Social Security benefits. The cost of living varies greatly from state to state, and choosing an affordable place to live can significantly impact a retiree’s purchasing power.

States like West Virginia, South Dakota, and Idaho offer retirees a lower cost of living, allowing them to stretch their Social Security benefits and maintain a comfortable standard of living. On the other hand, states like

Maryland have a higher cost of living, making it harder for retirees to make the most of their benefits.

Overall, choosing the right place to live can make the difference between struggling to make ends meet and living comfortably during retirement.

Popular Posts