States Where Retirees Have the Highest Incomes

The average retired household in the United States brings in about $27,617 a year from retirement accounts, according to a SmartAsset analysis of U.S. Census Bureau data. This number sits well below the national median household income of $80,610, and it tells you something important in that most retirees are living on far less money than the working population. But at the state level, the picture shifts, as the top-ranked states can see average retirement income climb past $35,000, which is almost double what retirees earn at the bottom of this list.

What separates high-income retirement states from the rest comes down to career earnings, pension access, and savings behavior. States with large concentrations of federal workers, military retirees, or tech and finance professionals tend to produce bigger nest eggs and larger Social Security checks. In addition, tax policy can play a role, as no-income-tax states like Alaska and Nevada often attract retirees who are looking to stretch their dollars as much as possible. Alternatively, higher-earning states like Maryland and Virginia allow residents to produce more income heading into retirement.

For income-focused investors, this data is context and not trivia. If you are building a portfolio that is going to replace a paycheck, it matters whether your target needs to clear $24,000 or $36,000 annually before Social Security enters the picture. Below are the fourteen top states where retirees can bring in the most retirement income, ranked from least to highest.

Florida's popularity as a retirement destination is well earned, but its spot near the bottom of this list reflects the sheer range of retirees it attracts. No state income tax helps maximize withdrawals, but the volume of modest-income households pulls the average down. The result is a $30,518 income figure that masks significant variation within the state.

New York's $30,326 income level in retirement is supported by strong career earnings in a host of professional roles, including access to Wall Street and other areas where decades of high wages can feed above-average Social Security benefits. The state's union presence has also historically put more workers into defined benefit plans. The lone challenge is that the state also has one of the highest costs of living in the country, so higher income doesn't automatically mean more purchasing power.

New Jersey retirees earn an average of $30,600, which is supported by strong career earnings in a host of professions, and its proximity to New York City means that plenty of retirees have spent decades earning top-tier salaries and maxing out retirement distributions. The state does tax income retirement, but those who stay are often in the best position to absorb it.

Nevada's $31,171 average benefits from the same magnet that draws many retirees in the first place, with no state income tax. Retirees who are relocating from California and other high-tax states stretch their withdrawals further, pulling the state average up over time. This ranking has less to do with what residents earned during their careers and more to do with where they choose to spend it.

Massachusetts retirees bring in $31,198 per year, powered by the state's deep bench of education, healthcare, biotech, and financial services employers. Boston's concentration of universities and hospitals means that many retirees had access to 403(b) plans and pensions throughout their careers. The cost of living is steep, but the income base entering retirement tends to be strong enough to support it.

Much of Illinois' $31,223 average is tied to the state's robust public pension system, with teachers, state employees, and municipal workers having historically received some of the most generous pension benefits in the country. Chicago's role as a corporate hub adds a deep pool of private-sector retirees with well-funded 401(k) plans.

Delaware's $31,283 average makes sense when you consider the financial services industry rooted in Wilmington. Major banks and credit card companies have long headquartered operations here, producing well-compensated professionals who retire with substantial savings. The state also offers favorable tax treatment for retirees, including exclusions on pension and retirement income.

The $32,052 average retirement income in Connecticut is a definite reflection of the state's high earning potential with hedge fund and insurance jobs, as well as proximity to New York's financial markets. Fairfield County alone houses some of the wealthiest zip codes in the country, and those retirees pull the state average up considerably. The state has been losing population, but retirees who remain tend to be among teh best-funded in the Northeast.

Hawaii's $32,994 average is notable given the state's extreme cost of living, with a significant military retiree population drawing pensions and benefits, which boosts the figure, along with a solid level of public-sector employment. Federal workers stationed in Hawaii earn geography pay premiums that inflate both their Social Security credits and retirement savings over the course of career.

Colorado retirees will bring in an average of $32,379 on average, supported by strong in-migration of well-educated professionals and a growing Front Range tech economy. Cities like Highlands Ranch, Boulder, and Centennial all rank high nationally for Social Security income, reflecting the high career earnings before retirement. The state taxes retirement income but offers meaningful deductions for older residents.

California's $34,737 average is the product of decades spent in the nation's largest economy. Dominance in technology and entertainment is just one of the areas where California's retirees have earned top-percentile wages that translated into maximum Social Security benefits. The does tax retirement income at full rates, which is why many retirees also tend to leave the state.

With a massive government and military presence, especially in Northern Virginia, the state's $35,506 average retirement income helps it appear in the top ten states nationally. Arlington and Alexandria, in particular, are among the best opportunities for retirees to have earned fully-funded 401(k)s, making it a retirement powerhouse thanks to proximity to Washington, D.C.

Driven by the same proximity dynamics as Virginia, Maryland offers a workforce full of federal employees, defense professionals, and researchers who spend their careers earning well and saving into generous retirement plans, leading to $35,732 in average retirement income. The area's suburbs house some of the highest-income households in the country during working years, and this advantage directly translates into higher retirement incomes.

Alaska tops the list at $36,023, a number that is nearly double what retirees earn in the lowest-ranked states. Without a state income tax, a significant military retiree population, and the petroleum industry pensions, create a uniquely high-income retirement environment. Federal workers stationed here can also earn geographic pay benefits that inflate both Social Security and savings, making Alaska a surprising but dominant high-paying state for retirement income.