What State Pays the Most in Social Security?
Learn how Social Security benefit amounts vary significantly by state, considering underlying factors and tax implications.
Social Security is a federal program providing essential financial support through retirement, disability, and survivor benefits. While the Social Security Administration (SSA) oversees this program uniformly across the United States, average benefit amounts can vary significantly by state. This variation often sparks curiosity about which states receive the highest average benefits and the underlying reasons for these differences.
States with the Highest Average Social Security Benefits
The average monthly Social Security benefit for retired workers in July 2025 was $2,006.69 nationally. Connecticut leads the nation with the highest average monthly Social Security check, at $2,196.15. Following closely are New Jersey at $2,190.05, New Hampshire at $2,183.82, Delaware at $2,170.63, and Maryland at $2,139.54. These figures represent averages for retired workers, and individual benefit amounts will differ based on specific circumstances.
Conversely, states in the Southern region tend to have lower average benefits. Mississippi, for instance, records an average of $1,814.24, followed by Louisiana at $1,818.40, Arkansas at $1,852.07, New Mexico at $1,865.12, and Kentucky at $1,865.76.
Key Factors Driving State Averages
The Social Security benefit formula is federally standardized, but the inputs to this formula vary based on a state’s population characteristics, leading to differing average benefits. A primary factor is the average lifetime earnings of a state’s workforce. States with higher average wages and incomes generally have residents who contributed more to Social Security through payroll taxes over their careers. These higher contributions translate into larger average monthly benefits upon retirement.
Demographics also play a role, particularly the age and claiming patterns of a state’s beneficiaries. States with an older population, or a higher proportion of retirees who worked longer and potentially delayed claiming benefits, may exhibit higher average benefit amounts. Claiming benefits at one’s full retirement age (FRA) or later can significantly increase monthly payments, while claiming early, such as at age 62, results in a permanent reduction of up to 30%. While not a direct factor in benefit calculation, a higher cost of living often correlates with higher wages, indirectly contributing to higher average benefits in those areas.
State Taxation of Social Security Benefits
Beyond the average gross benefit, the net amount a recipient receives can be influenced by state income taxes on Social Security benefits. Most states, specifically 41 states and the District of Columbia, do not tax Social Security benefits. However, nine states currently tax Social Security benefits: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont, and West Virginia.
The approach to taxation in these states varies. Many of them provide income thresholds or exemptions, meaning benefits are only taxed if a recipient’s adjusted gross income (AGI) exceeds a certain amount. For example, some states may exempt benefits entirely below a specific income level, or offer partial exemptions above it. West Virginia, for instance, is in the process of phasing out its Social Security tax entirely, with full exemption for all income levels expected by 2026. This state-level taxation is separate from any federal income tax liability on Social Security benefits.