Social Security is an important source of income for most retired Americans, but benefits vary greatly across the 50 states. For instance, the median-monthly payout for New Jersey residents exceeds the median-monthly payout for Mississippi residents by more than $420, and the annual discrepancy tops $5,100.

However, the Social Security Administration (SSA) does not consider state of residence when calculating retired-worker benefits, at least not directly. Read on to learn why payments vary based on geography and to see the average (median) Social Security benefit across all 50 states.

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The average (median) Social Security benefit in all 50 states

The words “average” and “mean” are often used interchangeably, but the former is actually a broad term that encompasses three statistical measures of central tendency: mean, median, and mode. When considering differences in Social Security benefits, the median is the best metric because it represents the middle value of the 50th percentile.

In other words, half of the values in a data set fall above the median, and half of the values in a data set fall below the median. That makes it easy for individuals to benchmark their own Social Security payout against that of the broader population. The chart below details the median retired-worker benefit in all 50 states as of December 2023.

Data source: Social Security Administration. Note: Benefit amounts have been rounded to the nearest dollar.

As shown above, the average Social Security payout across all 50 states was $1,853 as of December 2023. That means half of retired workers in the U.S. received larger benefits, and the other half of retired workers received smaller benefits.

Also noteworthy, monthly Social Security payouts ranged from $1,673 in Mississippi at the low end to $2,100 in New Jersey at the high end. As mentioned, state of residence does not factor into the benefits formula, at least not directly. So, it’s logical to wonder what causes the discrepancy between states.

Why Social Security retired-worker benefits differ between states

The variation in Social Security benefits between states is partly due to random chance, but differences in median income are the primary reason for the discrepancies. Retired-worker benefits are based on lifetime income and claiming age, so it makes sense that states with higher-median incomes would also have higher-median Social Security payments.

Indeed, the five states listed below have the highest-median Social Security benefits in the U.S., and three of the states — New Jersey, New Hampshire, and Maryland — rank in the top-10 states in terms of median income, according to the U.S. Census Bureau. And the other two states have median incomes above the national average.

• New Jersey: $2,100
• Connecticut: $2,084
• Delaware: $2,064
• New Hampshire: $2,039
• Maryland: $2,008

Similarly, the five states listed below have the lowest-median Social Security benefits in the U.S., and four of the states — Mississippi, Louisiana, New Mexico, and Arkansas — rank in the bottom-10 states in terms of median income, according to the U.S. Census Bureau.

• Mississippi: $1,673
• Louisiana: $1,674
• New Mexico: $1,696
• Washington D.C.: $1,696
• Arkansas: $1,717

Washington D.C. is an anomaly because it simultaneously ranks in the top-10 states (or districts) in terms of the median income and the bottom-10 states in terms of the median Social Security benefit. That could be due to random chance, or it may be related to the exceptionally high cost of living of the District of Columbia.

To elaborate, Washington D.C. is the third-most expensive place to live in the U.S., behind Hawaii and California. The cost of living in the District of Columbia is 40% above the national, according to the Missouri Economic Research and Information Center. So, people who can afford to move when they retire may choose to do so at an abnormally high rate. In other words, retirees with higher Social Security benefits may be more likely to leave, which would drag the median payout down.

Here is the bottom line: The median Social Security payout varies greatly between states but not because geography has any direct impact on retired-worker benefits. Instead, the discrepancies between states are partly due to differences in median income and partly due to random chance related to (1) differences in claiming age and (2) where people choose to retire.

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