Most people rely on Social Security income to pay for their retirement expenses. Almost all retirees (84 percent) qualify for Social Security payments, and the majority of retirees (61 percent) receive at least half their income from Social Security, according to the Social Security Administration. For a third of retirees, Social Security is their only major source of income in retirement.
It isn’t easy to live on just a Social Security check. The average monthly Social Security payment was $1,341 in January 2016. A married couple where each member received an average Social Security check would have a retirement income of $32,184, which would be adjusted for inflation each year. “To be just depending on Social Security is really a very difficult situation to be in,” says Alicia Munnell, director of the Center for Retirement Research at Boston College. But where you live plays a big role in how comfortable you will be. “The cost of living varies dramatically across the country,” Munnell says. “If you are in a low-cost area, you can make that benefit stretch much further than if you are trying to do it in Boston or Washington, D.C.”
Social Security checks produce enough income to cover basic expenses in some parts of the country, but that’s not the case everywhere. A U.S. News analysis of 104 major metropolitan areas using U.S. Census Bureau and Bureau of Labor Statistics data found that a married couple receiving two average Social Security payments would have enough money to cover the costs for housing, food, transportation, health care and utilities in two-thirds of major cities.
But in other metro areas Social Security alone does not provide enough to cover even these five basic expenses. In several major cities — including Bridgeport, Connecticut; Oxnard, California; San Francisco; Honolulu; New York; San Jose, California; and the District of Columbia — the typical Social Security income doesn’t even come close to covering basic expenses, largely due to high housing costs.
To further identify places where you could pay your bills and enjoy a high quality of life when your primary source of income is Social Security, U.S. News factored in crime rates, access to health care and recreation opportunities. However, it’s important to note that this analysis did not include many other costs retirees could incur, including clothing, consumer goods, hobbies, recreation, travel or emergency expenses. Even in places where Social Security will cover basic expenses, retirees would be more comfortable with a second source of retirement income from a pension, part-time job, investment earnings or personal savings.
It’s particularly important for retirees who are relying on Social Security to take steps to maximize their benefit. Social Security payments are reduced if you claim them before your full retirement age, which is 66 for most baby boomers. Monthly benefit payments increase if you delay starting your benefit between ages 66 and 70. “If you are able to delay retirement until you can maximize your Social Security benefit at age 70, that would be the best possible single thing you could do,” says John Palmer, a Syracuse University professor and former public trustee for the Medicare and Social Security programs. “You will have continued earnings for longer, maybe be able to save a little bit more money and your Social Security benefit will be about a third higher than if you retired at the normal age of retirement, and much higher than if you had chosen an early retirement.”
Paying off your home also makes it much easier to live well on little more than a Social Security check. In all the places analyzed, retiree homeowners who were living without a mortgage paid significantly lower housing costs than those making mortgage payments or renting, which allows them to use Social Security payments for other essential bills.
Here are 10 places where retired couples could cover basic costs on little more than a Social Security income.
Emily Brandon is the author of “Pensionless: The 10-Step Solution for a Stress-Free Retirement.”