This article takes a look at the 15 best states to retire for women in the US. If you wish to skip our detailed analysis on unveiling the gender gap in retirement savings, you may go to the 5 Best States to Retire for Women in the US.
Unveiling the Gender Gap in Retirement Savings
Is Social Security gender-neutral? According to the Social Security Administration, yes, it is. Women with identical earning histories as men are treated the same in terms of benefits. But if Social Security is truly gender-neutral, why do men receive larger monthly benefits than women, even when they’ve worked in the same positions? As of 2021, the average annual Social Security income received by women 65 years or older was $14,204, as compared to $18,108 for men. The next year, it was reported that women received lower pension benefits largely due to their “relatively lower earnings” and higher share of “part-time work”. If this doesn’t demonstrate that retirement is possibly a harder time for women, the situation is compounded by the fact that women typically outlive men in retirement, placing them at a higher risk of depleting their retirement funds.
So it seems that the Social Security Administration’s claim of gender-neutrality isn’t a facade. Apparently, it’s the income disparity between men and women, rooted in earning differentials, that is to blame. On average, women in the US receive 83 cents for every dollar that men receive. Statistics also show that men dominate higher-paying jobs even today. As of 2023, women were paid 21.8% less than men on average, and that too after controlling for factors such as race and ethnicity, education, age, and geographic division. Morgan Stanley (NYSE:MS) summarizes a list of all factors responsible for women facing the huge gender gap. They state that women face wage gaps, more career interruptions, and have longer life expectancy that are together responsible for the gap. This is further worsened by the fact, notes Morgan Stanley (NYSE:MS), that they are less confident about retirement savings and are less likely to take on investment risks.
“Women take on many roles and often navigate complex lives. A solid financial foundation can help a woman take care of her family, look out for her future, and simplify her life.”
Shelley O’Connor — Chairman and CEO Morgan Stanley Private Bank, N.A. Morgan Stanley Bank, N.A
A further analysis by T. Rowe Price Group, Inc. (NASDAQ:TROW) on women and retirement states how access to retirement plans has no gender gaps either, but women greatly lag behind men when it comes to contributions, savings, and retirement confidence in general. The factors that T. Rowe Price Group, Inc. (NASDAQ:TROW) highlights when it comes to the retirement gap that they face are lower incomes, a higher load of debt, and shorter job tenures. A 2022 T. Rowe Price Group, Inc. (NASDAQ:TROW) Retirement Savings and Spending Study, a survey analyzing a nationally representative group of 401(k) participants, focused on the gender gap in retirement savings—aims to shed light on these disparities.
The survey shows that women have been contributing less to their workplace retirement accounts, resulting in lower retirement account balances. The median 401(k) balance for women, they found, was 65% lower than men. The study further finds out that at any given level of income, women were more likely to participate in retirement plans than men, implying that had there been no income disparities, they would be very likely to save more than men.
To conclude, it can be safe to say that the retirement savings gap between men and women is attributable to a number of complex factors. In such a scenario, searching for the best age for a woman to retire in the US, or even figuring out how much a woman needs for retirement, may seem like the right questions to ask. The age women should be retiring depends on when they can claim their full retirement benefits, and how much they have already saved for retirement. Moreover, since women on average live 5 years longer than men, they need savings that can last them longer too. While addressing these issues promptly is crucial, it’s also important for women to navigate their current situation effectively. With this in mind, we’ve compiled a list of the top states for women to retire in the US.
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Methodology
To compile a list of the best states to retire for women in the US, we began by listing out all the states in the US. Next, we ranked the states based on the average life expectancy of women in each state, the average Social Security check that a woman receives on average, women’s earnings as a percentage of men in each state (as many retirees work part-time), cost of living, and tax-friendliness. Life expectancy was sourced from KFF; women’s earnings as a percentage of men were taken from BLS 2022 averages, and average SS monthly benefits were taken from our previous computations on the best states to retire in the US financially. On average, women receive $354 less than men in benefits, which was subtracted when calculating the estimated average benefits that a woman receives in each state. Cost of living and tax-friendliness have been taken from our previous articles. States were ranked and scores were summed up to calculate an Insider Monkey Score. The top 15 states are presented below.
By the way, Insider Monkey is an investing website that tracks the movements of corporate insiders and hedge funds. By using a similar consensus approach, we identify the best stock picks of more than 900 hedge funds investing in US stocks. The top 10 consensus stock picks of hedge funds outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). Whether you are a beginner investor or a professional one looking for the best stocks to buy, you can benefit from the wisdom of hedge funds and corporate insiders.
Here are all the best states to retire for women in the US:
15. New Hampshire
Insider Monkey Score: 136
Estimated Average SS Monthly Benefits: $1609.5
Women’s Earnings as a Percentage of Men’s: 75.4
Life Expectancy: 81.5
Cost of Living: 114.1
Tax Friendliness: Tax-Friendly
Ranking 15th on our list of best states to retire for women in the US is New Hampshire. This tax-friendly state doesn’t tax Social Security or retirement income, and its estimated average Social Security monthly benefits for women are comparatively higher than other states. The life expectancy of women in this state is 81.5 years.
14. New Jersey
Insider Monkey Score: 137
Estimated Average SS Monthly Benefits: $1662.6
Women’s Earnings as a Percentage of Men’s: 83.5
Life Expectancy: 80.5
Cost of Living: 113.9
Tax Friendliness: Moderately Tax-Friendly
A WalletHub study recently ranked New Jersey as one of the best states for working moms. Well, the state is good for retired females just as much. The average life expectancy for a woman here is 80.5 years, and those interested in working should know that women’s earnings as a percentage of men are higher than in many other states.
13. Oregon
Insider Monkey Score: 137
Estimated Average SS Monthly Benefits: $1476.3
Women’s Earnings as a Percentage of Men’s: 89.2
Life Expectancy: 81.3
Cost of Living: 114.7
Tax Friendliness: Moderately Tax-Friendly
Oregon may be moderately tax-friendly for retirees and have a cost of living higher than the national average, but retired women who wish to work have a better chance to earn since women’s earnings as a percentage of men is 89.2%. Living on only Social Security benefits can be hard, which leaves retirees with little or no savings no option but to continue working in retirement. The cost of living in many cities and towns in the state is affordable as compared to the state average.
12. Illinois
Insider Monkey Score: 139
Estimated Average SS Monthly Benefits: $1503.1
Women’s Earnings as a Percentage of Men’s: 80.3
Life Expectancy: 79.8
Cost of Living: 92.1
Tax Friendliness: Tax-Friendly
One of the best states to retire in the US financially is Illinois. Illinois is not just a tax-friendly state but also boasts a cost of living that is 7.9% lower than the national average. Women who’ve worked and chosen to retire in this state have a better chance of securing a higher Social Security benefit since their earnings as a percentage of men is higher than in many other states.
11. Massachusetts
Insider Monkey Score: 139
Estimated Average SS Monthly Benefits: $1546.5
Women’s Earnings as a Percentage of Men’s: 85.8
Life Expectancy: 81.5
Cost of Living: 146.5
Tax Friendliness: Moderately Tax-Friendly
Massachusetts is another one of the best states considering retirement, boasting an Insider Monkey Score of 139. With an estimated average Social Security monthly benefit of $1546.5, women stand to receive better support than many other states. Additionally, the state has a considerably-moderate equitable gender pay ratio, with women earning 85.8% of what men earn. A noteworthy life expectancy of 81.5 years provides the promise of extended retirement enjoyment.
10. Pennsylvania
Insider Monkey Score: 141
Estimated Average SS Monthly Benefits: $1535.7
Women’s Earnings as a Percentage of Men’s: 82.1
Life Expectancy: 79.6
Cost of Living: 95.6
Tax Friendliness: Tax-Friendly
Another strong contender for the best state to retire for women in the US is Pennsylvania. Boasting a cost of living lower than the national average, a tax-friendly status, and a fairly better average monthly benefit, women have a better chance to live and then retire in this state. The state also boasts a good earning percentage as compared to men, standing at 82.1%.
9. Rhode Island
Insider Monkey Score: 143
Estimated Average SS Monthly Benefits: $1510.9
Women’s Earnings as a Percentage of Men’s: 99.6
Life Expectancy: 80.9
Cost of Living: 110.7
Tax Friendliness: Not Tax-Friendly
Rhode Island may be a bit expensive to live in on average, but there are plenty of cities and towns within the state that are affordable for retirees. What makes this state great to retire for women in particular is its impressive women’s earnings as a percentage of men’s, standing at 99.6%. The life expectancy for women here is pretty great too, standing at 80.9 years.
8. Nebraska
Insider Monkey Score: 150
Estimated Average SS Monthly Benefits: $1482.2
Women’s Earnings as a Percentage of Men’s: 87.7
Life Expectancy: 80.3
Cost of Living: 90.9
Tax Friendliness: Not Tax-Friendly
Next on our list of best states to retire for women in the US is Nebraska. The state is not just tax-friendly, but also boasts a cost of living that is lower than the national average. Life expectancy in the state is 80.3 years, and women earn 87.7% of what men earn in the state.
7. Kansas
Insider Monkey Score: 152
Estimated Average SS Monthly Benefits: $1533.1
Women’s Earnings as a Percentage of Men’s: 85.3
Life Expectancy: 79.2
Cost of Living: 87.1
Tax Friendliness: Moderately Tax-Friendly
Offering an estimated average Social Security monthly benefit of $1533.1, and a gender pay ratio of 85.3, Kansas is another option for women retirees to consider. While the life expectancy of 79.2 years is slightly lower, the state’s moderately tax-friendly policies and cost of living enhance its appeal as a retirement destination.
6. Michigan
Insider Monkey Score: 154
Estimated Average SS Monthly Benefits: $1563.5
Women’s Earnings as a Percentage of Men’s: 82.5
Life Expectancy: 78.8
Cost of Living: 90.6
Tax Friendliness: Tax-Friendly
Number six on our list of best states to retire for women is Michigan. The cost of living in the state is 9.4% lower than the national average, and the state is tax-friendly when it comes to retirement income.
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Disclosure: none. 15 Best States to Retire for Women in the US is originally published on Insider Monkey.
