Senior Citizens Underfunded for Retirement

Many senior citizens are seriously underfunded when it comes to retirement, according to a new study.

The study, conducted by financial information website, found seniors in 48 out 50 states (and the District of Columbia) are falling short, with those in Massachusetts facing the largest income gap, replacing only 45% of annual income rather than the 70% needed for retirement.

“People who live in a given area are competing with each other for the same goods and services, including housing, cars and groceries,” said Mike Sante, managing editor of “This is why we thought it would be useful to compare younger and older adults’ incomes in each state. We found that many senior citizens are significantly underfunded and risk running out of money, especially since people are living longer than they used to and may need to support a two- or three-decade retirement.” examined the U.S. Census Bureau’s 2011 “American Community Survey” (the most recent edition). For each state and the District of Columbia, it divided the median annual household income for those who are 65 and older by the median annual household income for those between 45 and 64 years old. Nevada (70.72%) and Hawaii (70.06%) were the only states to reach the coveted 70% threshold.

Those 65 and older were able to replace at least 60% of their younger counterparts’ annual incomes in 19 states and the District of Columbia. Arizona (68.10%), New Mexico (66.89%) and Florida (66.86%) join Nevada and Hawaii in the top five.

In the four lowest-ranking states—New Jersey (49.53%), Rhode Island (48.20%), North Dakota (48.17%) and Massachusetts (45.21%)—people ages 65 and older are unable to replace even 50% of their younger counterparts’ incomes.

Nationally, the average income for those who are 65 and older equals just 57% of the average income for those ages 45 to 64. found Social Security is the primary source of income for a majority of retired Americans, with the average Social Security payment for a retired worker at the start of 2012 recorded as $1,230 a month ($14,760 a year).

Complete rankings of all 50 states and the District of Columbia can be found here.