When inflation surges and money loses its buying energy, retirees’ hard-earned financial savings out of the blue don’t go so far as they anticipated. Inflation might also result in widespread wage will increase, however retirees sometimes don’t profit from wage progress as a result of they’ve already left the workforce.
Nevertheless, the Social Safety Administration adjusts advantages in an try to preserve tempo with the rising value of products and providers. As inflation spiked lately, these annual value of dwelling changes (COLAs) pushed Social Safety advantages 1.3% and 5.9% larger in 2020 and 2021, respectively. With this in thoughts, SmartAsset got down to uncover the place seniors rely essentially the most on social safety by analyzing earnings information for seniors in 100 U.S. cities.
That is SmartAsset’s sixth version of our examine on the cities the place retirees rely most on Social Safety. You’ll be able to learn the 2022 examine right here.
Key Findings
-
Social Safety contains over 40% of a retiree’s earnings, on common. The typical retiree within the U.S. obtained 41.6% of their complete earnings ($50,780) from Social Safety in 2021, barely up from 41.50% in our 2022 examine. The proportion is even larger for retirees in some cities, the place Social Safety can attain as much as 50% of total retirement earnings.
-
The 65+ inhabitants in Nashville, Lincoln and Charlotte is rising quick. The senior inhabitants in these cities have grown 15.12%, 14.20% and 12.89%, respectively between 2017 and 2021. In the meantime, the retired inhabitants turned extra reliant on Social Safety in comparison with final yr’s rankings: Nashville and Lincoln every jumped three spots, whereas Charlotte’s senior inhabitants shot up from forty fifth to tenth.
-
Midwestern cities are extra reliant on Social Safety, whereas California seniors produce other sources of earnings. Cities in Indiana, Kansas, Nebraska, Michigan and Ohio frequent the highest 10 cities the place seniors are most reliant on Social Safety, whereas California cities dominate the ten least dependent.
The place Retirees Depend on Social Safety Most
1. Fort Wayne, IN
For the fifth yr in a row, Fort Wayne claims the highest spot in our examine. Retirees right here get greater than half (50.04%) of their total retirement earnings from Social Safety – lower than final yr when it made up greater than 52% of retiree earnings. This means different earnings sources for retirees in Fort Wayne saved up higher than Social Safety. In the meantime, the inhabitants for these 65 and older has grown 8.87% between 2017 and 2021.
2. Wichita, KS
Retirees in Wichita have a mean annual earnings of $45,220, of which just below half (49.81%) comes from Social Safety. As soon as revered as the most important plane manufacturing hub on this planet, Wichita is now residence to over 62,500 residents who’re 65 and older and may take pleasure in many cultural actions on the Wichita Symphony Orchestra, the Wichita Artwork Museum and the Orpheum Theatre.
3. Nashville, TN
Retirees in Nashville can benefit from legendary reside music venues just like the Grand Ole Opry and Bluebird Cafe. Greater than 89,000 seniors 65 and older name this metropolis residence. Social Safety makes up 48.15% of their complete retirement earnings ($46,133), which is up from 45.80% within the 2022 examine.
If you happen to’re able to be matched with native advisors that may enable you to obtain your monetary objectives, get began now.
4. Lincoln, NE
Retirees dwelling in Nebraska’s capital depend on Social Safety for 47.10% of their complete earnings ($49,979), up from 45.56% a yr in the past. Nearly 43,000 seniors 65 and older reside in Lincoln and this inhabitants grew 14.20% between 2017 and 2021.
5. Shock, AZ
Positioned about 30 miles northwest of Phoenix, Shock’s senior inhabitants declined by 2.51% between 2017 and 2021. Town has the second-highest common Social Safety profit throughout our examine at $24,890, which accounts for 46.78% of the whole retirement earnings. Shock is residence to various golf programs, and retirees may catch a glimpse of two Main League Baseball groups, the Texas Rangers and Kansas Metropolis Royals, at their spring coaching amenities.
The place Retirees Depend on Social Safety Least
1. Washington D.C.
Retirees in our nation’s capital get 30.22% of their earnings from Social Safety, lower than some other metropolis in our examine. Social Safety pays the typical D.C. retiree $18,942 per yr; whereas different retirement earnings streams common $43,744. Greater than 85,000 residents 65 and older name this metropolis residence.
2. Chula Vista, CA
Social Safety accounts for 31.63% of the typical retiree’s complete earnings in Chula Vista. That’s greater than 3.5 factors decrease than in our 2022 examine, when it supplied retirees with 34.01% of their retirement earnings. Positioned about 10 miles south of San Diego, Chula Vista noticed its 65-and-older inhabitants enhance 15.74% between 2017 and 2021. Town’s heat climate, seashores and out of doors recreation make this Southern California metropolis a lovely retirement vacation spot.
3. Riverside, CA
Inland of Los Angeles, Riverside is residence to greater than 34,000 retirees who’re 65 and older, and this inhabitants has grown 7.87% between 2017 and 2021. The typical retiree right here lives on $56,424 per yr, with Social Safety making up 33.53%.
4. Sacramento, CA
California’s capital metropolis has seen a senior growth lately. Sacramento’s 65-and-older inhabitants elevated 23.44% between 2017 and 2021. The typical retiree right here depends on Social Safety to cowl 33.56% of their total retirement earnings ($55,815). Sacramento’s proximity to California wine nation makes it an excellent retirement locale for wine lovers.
5. Glendale, CA
Positioned simply north of Los Angeles, the town of Glendale noticed its 65-and-older inhabitants shrink by 1.23% between 2017 and 2021. The typical retiree in Glendale collects $20,411 in Social Safety, which makes up 33.88% of their complete retirement earnings ($60,248). Retirees right here can benefit from the town’s downtown purchasing space, which incorporates an out of doors mall.
Knowledge and Methodology
To seek out the locations the place retirees rely most on Social Safety, we examined information for social safety earnings as a share of total retirement earnings within the 100 cities with the most important inhabitants of residents ages 65 and older. Particularly, we appeared on the following two metrics:
-
Common retirement earnings for senior households. That is all earnings which comes from pension plans, periodic earnings from annuities or insurance coverage and earnings from IRA plans. Knowledge comes from the U.S. Census Bureau’s 2021 1-year American Group Survey.
-
Common Social Safety earnings for senior households. This contains Social Safety pensions and survivors advantages and everlasting incapacity insurance coverage funds made by the Social Safety Administration. Knowledge comes from the U.S. Census Bureau’s 2021 1-year American Group Survey.
Social Safety Planning Ideas
-
Work with an expert. A monetary advisor may also help you construct a complete retirement plan that integrates Social Safety into your different earnings streams. Discovering a monetary advisor doesn’t must be exhausting. SmartAsset can match you with as much as three vetted monetary advisors who serve your space, and you’ll interview your advisor matches for free of charge to resolve which one is best for you. If you happen to’re prepared to search out an advisor who may also help you obtain your monetary objectives, get began now.
-
Run your numbers. Realizing how a lot you may anticipate in Social Safety is a crucial piece of the retirement planning puzzle. SmartAsset’s Social Safety calculator may also help you estimate how a lot your profit will likely be primarily based in your earnings, age and while you plan to start out gathering.
-
Think about delaying Social Safety in a down market. It’s vital to grasp the danger of getting into retirement throughout a bear market. Early withdrawals out of your portfolio could lock in funding losses and cut back the longevity of your financial savings. Regardless of this, we not too long ago discovered that delaying Social Safety till full retirement age really produces extra complete retirement earnings over a 30-year interval in comparison with claiming at age 62, even when it means exhausting your financial savings sooner.
Questions on our examine? Contact us at press@smartasset.com
Picture credit score: ©iStock.com/Invoice Oxford
The put up How Essential Is Social Safety to Retirees in U.S. Cities? 2023 Research appeared first on SmartAsset Weblog.