Paid Off Your Mortgage? These States Let You Live Well on Social Security Alone

by Allaire Conte

Paying off your mortgage was long seen as a key milestone to achieving stability in retirement. Without housing debt or rent to pay, the theory went, you could budget for predictable costs and comfortably live off of benefits and modest savings.

But today, the rising costs of homeownership are complicating the picture. In the past five years, the cost of homeownership has jumped 26% as hidden expenses rise. And now, Social Security alone is enough to cover the living expenses in only 10 states, according to the Realtor.com® analysis of median Social Security benefits by state and the Elder Economic Security Standard Index. Everywhere else, retirees face shortfalls as great as thousands of dollars per year.

One of the major drivers of these shortfalls is housing costs, even without a mortgage. Here’s a look at the states where a retiree in good health and no mortgage can count on Social Security alone to age in place with dignity.

Even with the mortgage gone, most retirees can’t rely on Social Security to cover their living costs. Benefits alone were enough to cover living expenses in only 10 states, while nationally, the average annual shortfall is about $2,762, or roughly $230 a month.

It’s a striking finding given that nearly 22 million seniors are estimated to live on Social Security alone, according to a June 2025 study from The Senior Citizens League. The league also estimates that nearly three-quarters of all seniors rely on Social Security for at least half their income, underlining just how important it is to understand the difference between living expenses and what Social Security can realistically cover.

While eliminating a mortgage certainly helps stretch benefits further, it doesn’t erase the bills that come with homeownership. Utilities, property taxes, and home insurance have all seen monumental increases in the past five years, and housing costs (sans mortgage) were one of the biggest contributors to the states that ended up in a surplus or shortfall.

There are just 10 states where the typical retiree can live mortgage-free on Social Security alone. Delaware tops the list with an annual surplus of $1,764, or about $147 a month. At the other end of the surplus spectrum, Michigan squeaks by with just $132 a year, or roughly $11 a month.

What helps set these states apart is their relatively modest housing costs. In surplus states, retirees spend an average of about $510 a month on housing, often below $550, compared to more than $900 in shortfall states. That amounts to roughly 27% of total living costs, a manageable share that keeps budgets in balance even on benefits alone.

Delaware

Annual surplus: +$1,764
Total monthly costs: $1,992
Monthly housing costs: $555
Median monthly benefit: $2,139

Indiana

Annual surplus: +$1,392
Total monthly costs: $1,900
Monthly housing costs: $504
Median monthly benefit: $2,016

Arizona

Annual surplus: +$1,224
Total monthly costs: $1,874
Monthly housing costs: $531
Median monthly benefit: $1,976

Utah

Annual surplus: +$888
Total monthly costs: $1,933
Monthly housing costs: $530
Median monthly benefit: $2,007

South Carolina

Annual surplus: +$828
Total monthly costs: $1,860
Monthly housing costs: $486
Median monthly benefit: $1,929

West Virginia

Annual surplus: +$660
Total monthly costs: $1,806
Monthly housing costs: $398
Median monthly benefit: $1,861

Alabama

Annual surplus: +$576
Total monthly costs: $1,805
Monthly housing costs: $419
Median monthly benefit: $1,853

Nevada

Annual surplus: +$432
Total monthly costs: $1,805
Monthly housing costs: $423
Median monthly benefit: $1,841

Tennessee

Annual surplus: +$156
Total monthly costs: $1,870
Monthly housing costs: $474
Median monthly benefit: $1,883

Michigan

Annual surplus: +$132
Total monthly costs: $2,056
Monthly housing costs: $531
Median monthly benefit: $2,067

At the other end of the spectrum are the states where Social Security alone leaves retirees thousands of dollars in the hole each year. Vermont is the toughest case, with an annual shortfall of $8,088. Across the bottom 10 states, the gaps range from a deficit of $3,612 to $8,088 annually.

Vermont

Annual shortfall: -$8,088
Total monthly costs: $2,628
Monthly housing costs: $838
Median monthly benefit: $1,954

New Jersey

Annual shortfall: -$7,512
Total monthly costs: $2,798
Monthly housing costs: $1,304
Median monthly benefit: $2,172

Massachusetts

Annual shortfall: -$7,345
Total monthly costs: $2,634
Monthly housing costs: $1,007
Median monthly benefit: $2,022

New York

Annual shortfall: -$7,248
Total monthly costs: $2,578
Monthly housing costs: $1,065
Median monthly benefit: $1,974

New Hampshire

Annual shortfall: -$6,564
Total monthly costs: $2,668
Monthly housing costs: $921
Median monthly benefit: $2,121

Connecticut

Annual shortfall: -$5,436
Total monthly costs: $2,612
Monthly housing costs: $983
Median monthly benefit: $2,159

Rhode Island

Annual shortfall: -$4,164
Total monthly costs: $2,341
Monthly housing costs: $740
Median monthly benefit: $1,994

Alaska

Annual shortfall: -$4,152
Total monthly costs: $2,141
Monthly housing costs: $623
Median monthly benefit: $1,795

Maryland

Annual shortfall: -$3,672
Total monthly costs: $2,390
Monthly housing costs: $755
Median monthly benefit: $2,084

Maine

Annual shortfall: -$3,612
Total monthly costs: $2,110
Monthly housing costs: $637
Median monthly benefit: $1,809

Why housing costs can make or break retirement budgets

Assuming a person is in relatively good health, food, health care, and transportation costs remain fairly consistent across the country, the Elder Index data shows. But housing costs are what really separate the states where Social Security is enough from those where it falls short.

In the 10 surplus states, retirees spend an average of roughly $500 a month on housing expenses after the mortgage is gone. West Virginia comes in the lowest at $398 per month.

By contrast, in shortfall states, housing costs are nearly double, averaging $933 per month. The biggest culprits are East Coast states such as New Jersey, Massachusetts, New York, New Hampshire, and Connecticut, all of which exceed $1,000 per month.

The difference isn’t just the size of the bill but also the share of the budget: in surplus states, housing eats up about 27% of total costs, while in shortfall states it jumps to 32%. That five-point spread tips retirees in shortfall states over the recommended 30% rule, the federal benchmark used by the Department of Housing and Urban Development to define housing affordability.

Even without a mortgage, retirees must budget for property taxes, insurance, utilities, and maintenance. These ongoing costs vary widely by state and explain most of the gap between surplus and shortfall. The data suggests that in high-tax states such as New Jersey and New York, property taxes alone can push retirees deep into the red.

While Social Security is adjusted annually for inflation—known as the cost of living adjustment, or COLA—retirees have been raising the alarm that these incremental increases haven’t been keeping pace with the true rising costs of living.

“Social Security checks aren’t keeping up with inflation,” executive director Shannon Benton said in a press release for The Senior Citizens League study. “If four in five seniors think inflation was higher than the government reported in 2024, maybe we should stop questioning their experiences and start questioning why the COLA is failing to measure them.”

To complicate matters, Social Security is expected to be insolvent by 2033, meaning that if Congress doesn’t act before then, benefits will have to be reduced. Early estimates show that the cuts could result in seniors receiving only 77% of their typical benefit.

It’s not reason to panic, but it is reason to plan. Retirees counting on Social Security should factor in the possibility of reduced benefits and the reality of rising costs. That may mean working longer, saving more, supplementing with part-time income, or considering a move to a lower-cost state.