The average social security benefit wont cover basic expenses

The average social security benefit wont cover basic expensesThe average social security benefit wont cover basic expensesSocial security was initially intended as a safety net to keep people out of poverty. There are a few different ways to become eligible, including reaching retirement age, becoming the widow of a former beneficiary, blind or disabled.The bargain is simple enough to understand. Workers and employers pay into the system for several years. Once someone becomes eligible for benefits, he or she relies on the government to make distributions. Its a great idea in theory, but in reality, there are a few structural problems to consider, not the least of which is how the Social Security Administration is now tapping into its trust fund to make payouts. Our new visualization highlights yet another key problem.Click here to view full sizeWe originally found the data for our visualization from GoBankingRates, which in turn collected the underlying information from the Social S ecurity Administration, the Missouri Department of Economic Development and Zillow. We stack ranked each state based on the total cost of living, taking into account median rent, average grocery bills, utilities, transportation and healthcare costs. We then plotted the average monthly social security benefit of $1,295 to determine which states have the biggest problems in terms of affordability for people relying on the program for most (or all) of their expenses.These are the ten states with the largest gaps between what social security pays out and the cost of living. We are including the percentage of living expenses that an average social security benefit will cover.1. Hawaii 26.7%2. Washington, DC 28.8%3. California 29.1%4. Massachusetts 31.6%5. Alaska 32.1%6. New York 34.2%7. New Jersey 34.2%8. Connecticut 35.4%9. Washington 35.4%10. New Hampshire 36.0%Our visualization signals an ugly truth social security hardly affords anyone a decent standard of living on its own. In 45 st ates, it doesnt even cover 50% of the cost of living (make that 46 if you count Washington, DC.) The absolute best state in the country is Arkansas, and even there it doesnt even provide 60% of the cost of living. At best, social security might be enough to cover a handful of bills for most people, but in a lot of places its not enough to even make rent.Take a closer look at the geographic distribution of our ranking. States in the Deep South appear to be clustered toward the bottom, meaning social security provides for a larger share of living expenses in those places as compared to the Midwest or the Northeast, both of which tend to be higher on the visualization. This creates yet another incentive for people to relocate once they departure receiving benefits to warmer climates where its easier to make ends meet.What are the implications of these numbers? Social security just isnt enough to enjoy an average standard of living. That could mean a few things for beneficiaries continu e working, get a job, find help from someone else (by moving in with adult children), drastically lower living expenses (by moving to a new state), or rely on savings (which most people dont actually have). In fact, the vast majority of social security beneficiaries are retirees, and according to the Government Accountability Office, 29% of Americans have no retirement savings whatsoever.To summarize Americans dont have the savings to retire comfortably, social securitys trust fund will be depleted in 8 years, the government will either issue debt to make payments or raise taxes to cover the difference, and the benefits are insufficient to make ends for all beneficiaries meet anyway. All of this suggests that something is going to break sooner or later.Data Table 1.1This article first appeared on HowMuch.