What to do if Social Security benefits are overpaid
Overpaid beneficiaries have 90 days to submit exemptions or repayment plans or cut benefits.
- The average annual Social Security income in the 100 largest metropolitan areas is $21,500.
- Large cities like San Francisco and Los Angeles require substantial retirement savings of more than $1.6 million to retire comfortably.
- More affordable cities for retirees include Pittsburgh, Tucson and Rochester, with Social Security covering a higher percentage of costs.
According to federal agencies, Social Security is supposed to replace about 40% of the income earned during the year of work. That’s why Americans are being urged to save them for retirement.
However, for retirees in big cities, the Social Security dollar may not even go that far.
According to a new analysis by personal finance site Lendingtree, social security income covers only about 30% of what the average retiree spends in a year in large U.S. cities and their suburbs.
In the 100 largest metropolitan area, Social Security is found in a July 15 report from 24% of annual retirement spending (San Francisco) to 35% of annual spending (McAllen, Texas).
To retire comfortably in a big city, you need to save a lot of money
To live a comfortable retirement in any of these cities, you will need to save $1.6 million in Los Angeles or San Francisco, $1.3 million in Philadelphia or Chicago, and $1.1 million in Memphis, Tennessee.
“Living in America’s big cities today is expensive,” said Matt Schultz, chief consumer finance analyst at LendingTree. “We’re not breaking the news, but unfortunately, this isn’t always going to get better anytime soon, and it’s going to be a scary situation.”
The analysis used data from the Labor Bureau, Social Security Administration, and the US Census to estimate annual retirement spending and average Social Security benefits for each metropolitan area. Among the survey results:
- In the 100 largest metropolitan areas, the average annual Social Security income is $21,500. This is about 30% of what retirees spend in a year, and is pre-tax dollars.
- Social Security covers more than a third of average retirement spending in just one of the 100 metropolitan areas in McAllen, Texas.
- Of the 10 major cities with the thinnest social security, eight sit in California.
The most affordable cities for retirees don’t rank among the very large metros and have little in common except they are not in California. Comparatively affordable cities include Pittsburgh. Tucson, Arizona. Rochester, New York
“These are very different cities in all sorts of ways,” Schultz said. “One thing that this shows is that the biggest cities in big cities are challenged in uncertain terms.”
How far is Social Security going in your city?
Here’s how far social security has progressed in some of America’s largest metropolitan areas: First listing the most affordable metros.
Pittsburgh: Social Security retirement income averages $21,978 per year, while retirement costs average $55,882 per year. Social Security covers 32.2% of the pre-tax dollars needed to cover that spending. This totals $68,176.
(For the rest of the cities on this list, I’ll skip the volatile “pre-tax” numbers. You get the idea.)
Rochester, New York: The average Social Security retirement income in Rochester is $22,581 per year. Retirees spend an average of $57,835 per year. Social Security covers 32% of annual retirement spending.
Ororama, Oklahoma City: Social Security income averages $20,860 and retirement spending averages $53,869. Social Security covers 31.7% of its spending.
Milwaukee: The average Social Security income is $21,784 per year. The average retirement spending is $56,533. Social Security covers 31.6% of its spending.
Indianapolis: Retirees spend an average of $56,000 per year in Indianapolis. The average Social Security income is $21,491. Social Security covers 31.5% of retirement spending.
Las Vegas: Social Security income averages $22,105 a year. Retirees spend $57,658 a year. Social Security covers 31.4% of its spending.
Detroit: On average, retirees spend $58,013 a year. Social Security income averages $22,117. Social Security covers 31.3% of retirement spending.
Monk, Iowa: Retirees spend an average of $54,876 per year. Social Security retirement income averages $20,817. Social Security covers 31.1% of retirement spending.
Louisville, Kentucky: Social Security income averages $20,948. Retirement spending averages $55,645. Social Security covers 30.9% of its spending.
Cleveland: Social Security income averages $20,665 and retirement spending is $55,053 per year. Social Security covers 30.8% of its spending.
Cincinnati: Social Security income averages $20,665 per year. Retirement spending averages $55,704. Social Security covers 30.4% of its spending.
Austin, Texas: Social Security income averages $21,398 and retirement spending is $57,776 per year. Social Security covers 30.4% of its spending.
Jacksonville, Florida: Social Security income averages $21,740. Annual retirement spending averages $58,723. Social Security covers 30.4% of its spending.
Columbus, Ohio: Social Security income averages $20,665 and retirement spending is $55,941 per year. Social Security covers 30.3% of its spending.
Nashville, Tennessee: Social Security income averages $21,157. Retirement spending averages $57,568. Social Security covers 30.1% of its spending.
Chicago: Social Security income averages $21,922. The average annual retirement cost is $60,736. Social Security covers 29.6% of its spending.
Houston: Social Security income averages $21,398 per year. Retirement spending averages $59,315. Social Security covers 29.6% of its spending.
Philadelphia: Social Security income averages $21,978 per year. Retirement spending averages $61,269. Social Security covers 29.4% of its spending.
Atlanta: Social Security income averages $21,317 per year. Retirement spending averages $59,730. Social Security covers 29.3% of its spending.
Phoenix: The average Social Security income is $21,989 per year. Retirement spending averages $62,453. Social Security covers 28.9% of its spending.
Dallas: The average Social Security income is $21,398 per year. Retirement spending averages $61,150. Social Security covers 28.7% of its spending.
Boston: Social Security income is $22,397 per year. On average, retirees spend $66,064. Social Security covers 27.8% of its spending.
new york: The average Social Security income is $22,581 per year. Retirement spending averages $66,597. Social Security covers 27.8% of its spending.
Miami: Social Security income averages $21,740. On average, retirees spend $66,182 a year. Social Security covers 26.9% of its spending.
San Diego: Social Security income averages $20,726. Retirement spending averages $66,005. Social Security covers 25.7% of its spending.
Washington DC: Social Security income averages $19,540. Retirement spending averages $64,288. Social Security covers 24.9% of its spending.
Los Angeles: Social Security income averages $20,726. Retirement spending averages $68,372. Social Security covers 24.9% of its spending.
San Francisco: Social Security income averages $20,726. Retirement spending averages $69,971. Social Security covers 24.3% of its spending.
