Many people who receive Social Security Disability Insurance payments find it hard to make ends meet based on SSDI alone. However, circumstances can differ among beneficiaries based on where they live and their state. Due to the cost of living along with some other factors, some states are better to live in than others.

These include Texas, Louisiana, Iowa, Nebraska, North Dakota, Ohio, Oklahoma, and Indiana. So far, Texas, especially with the low cost of living of cities like Abilene, is best known for being a tax haven, which means that SSDI payments won’t get taxed. 

Keep reading below as we discuss these places and their characteristics in more detail.

Which State Has The Best Disability Benefits?

Those who become disabled and are thereafter unable to work are eligible to receive disability benefits. Disability benefits are financial assistance that can be requested through the Social Security Administration. These benefits may help cover the costs of both day-to-day living and medical care.

Although SSA is a federal program with few variations between states, moving may affect your disability payments based on the kind of benefit you get and the state where you now reside.

Most Disability Friendly States

Following are some of the best states to live in as an SSDI beneficiary:

1. Louisiana

Shreveport, Louisiana, has one of the lowest costs of living of any city, making it a strong contender for the title. High prices for a one-bedroom and an average livability rating keep it from being ranked higher. Two cities in Louisiana make the cut, with Shreveport being the first. 

Lake Charles, Louisiana, also belongs on the list thanks to its exceptionally inexpensive average one-bedroom rent. The overall cost of living index is 83.1, with other costs ranking slightly higher. 

2. Texas

Lubbock, Texas, is the first of six towns in Texas that make the cut for the best places to live solely off of a Social Security check. Although Lubbock has a low livability rating, its overall costs are about 20% lower than the national average.

Rents and general costs in Killeen are just a bit lower than in Lubbock, another Texas city with similar rankings. The city’s livability rating is also only slightly lower than Lubbock’s. 

When compared to the other cities on this list, Midland has a higher-than-average cost of living. Midland, with expenditures only 8.3% below the national average, is the costliest of the top 15 places where one may get by on a Social Security check alone. However, the cost of a one-bedroom apartment is fairly low, making this a great option for budget-conscious people.

College Station, Texas, is among the best for livability with a score of 79, making it a top choice for retirees looking to make the most of their Social Security benefits. College Station is not the best since the average monthly rent for a one-bedroom apartment is higher than in other cities.

The average one-bedroom rental in San Angelo is $848.60 per month, more than double the national average. The city does well, though, because its overall cost of living is about 20% lower than the national average.

Abilene, Texas, tops the list of the finest places to live on a retirement income alone. Abilene has a low cost of living index, low average rent prices, and a high livability score, making it the best city in America for those trying to stretch a fixed income like Social Security.

3. Iowa

Besides Texas and Louisiana, Iowa is the only state with more than one city that is great to live in on SSDI payments alone, with both Des Moines and Davenport making the cut. Although the cost of living in Davenport is 21.5 percent less than the national average, one-bedroom rentals are very pricey.

Des Moines is probably the best when it comes to living on SSDI alone. The cost of living is low, and the livability score is good because the average one-bedroom rent is only $12.60 more than the best city in terms of rent, Abilene, TX.

4. Nebraska

When compared to the other top cities, Lincoln, Nebraska, has one of the best livability scores; nevertheless, its higher prices prevent it from being placed higher. The city’s cost of living is just 8.5% lower than the national average, and rents are rather costly when compared to other places.

5. North Dakota

Rents for a studio or one-bedroom in Fargo are above average, while the city’s overall cost of living is only 10.5% lower than the U.S. average. However, the city’s strong livability rating propels it onto our list.

6. Ohio

Cleveland, Ohio’s rentals are so low that the city is among the most affordable places to live for seniors. Cleveland has the lowest cost of living of any major American city, 27.7 percentage points lower than the national average. However, the city does have a poor livability score.

7. Oklahoma

Many Americans love living in Norman, Oklahoma because it is the home of the Oklahoma Sooners. Those who aren’t into football will still find the city’s high livability score and 13% lower-than-average cost of living attractive.

8. Indiana

Due to its low cost of living (which is 15% lower than the U.S. average), Jeffersonville, Indiana, has a high livability ranking. The city’s rather high cost for a studio apartment is a drawback, though.

What Is The Best State To Live On Disability Income?

The disability benefits provided by Social Security are an essential source of income for people who receive them. The money they get every month could be all they have to live on. However, receiving disability benefits alone can be challenging, if not impossible, in many parts of the United States.

The annual SSDI payment for someone receiving the average Social Security Disability benefit ($1,358.30) would be $16,299.60. In all 50 states, that wouldn’t even come close to covering the cost of basic necessities, and it’s only slightly higher than the federal minimum wage (about $15,080 annually).

Where Can You Live on SSDI Alone?

It may be difficult to find an affordable place to live if you’re disabled and rely on Social Security Disability Insurance benefits. Although the federal government issues Social Security Disability Insurance payments, each state sets its own rules for them.

In spite of the challenges, it is possible to get by on Social Security Disability Insurance alone. There are very few options to live on a budget in large cities, but the cost of living is reasonable in a good number of the nation’s mid-sized towns and cities. 

You may be able to maximize your benefits without compromising your quality of life if you are willing to relocate. Particular attention should be paid to the accessibility of buildings, the variety of attractions available, and the accessibility of public transit for people who use wheelchairs or other mobility aids.

The states of Texas and Florida are well-known for being tax havens since they have no state income tax. This also means that your SSDI payments will be unaffected by taxes in these states. While SSDI benefits are subject to taxation in some jurisdictions, this is not the case in others, such as Mississippi, Alabama, Ohio, and North Carolina.

What Happens to Disability Benefits If I Move in With Somebody?

Moving from one state to another should not affect your Social Security Disability Insurance benefits. This is because they are calculated using your previous employment and income. 

Your Supplemental Security Income (SSI) payments may be reduced if you move in with a friend, significant other, or family member who resides in another state. 

SSI is need-based rather than entitlement-based, like SSDI. Your eligibility for or amount of SSI benefits may change if you move in with someone who will be financially supporting you or who already receives SSI. So, if you find yourself in a similar situation, don’t delay in notifying the SSA.

Do I Need to Reapply for SSDI or SSI When Moving?

SSDI and SSI are both federal disability benefit programs. That means you can take your Social Security or Supplemental Security Income benefits with you to a new state without having to reapply for them. 

On the other hand, if you are thinking about moving, you should contact your neighborhood Social Security Administration office as soon as possible and let them know your new address. You can also do this via the Internet. 

By keeping your address up to date, you can help ensure that your checks for disability benefits are issued to your current location rather than the previous one you provided. 

What Happens If I Don’t Disclose My Relocation to the SSA?

You are required to immediately notify the Social Security Administration of any changes in your address, regardless of whether you are receiving SSI or SSDI benefits. 

In addition, if you are receiving SSI, you are required to notify them of any changes to your living situation within the first ten days of the month following the one in which the change takes place. 

If you fail to disclose the change in a timely manner, you run the risk of not receiving the full benefit amount, or alternatively, you run the risk of receiving more than you are entitled to (this is known as an overpayment) and having to pay some of it back.

You may be subject to a penalty from the Social Security Administration if you fail to disclose a change in your situation within the required time frame, and this penalty will be deducted from your regular benefits. 

You must also inform the state agency in charge of your state supplement if you are relocating from a state where the Social Security Administration does not administer your state supplement. 

If you fail to notify the state agency promptly of certain changes, they may impose penalties comparable to the Social Security Administration’s.

Best States to Retire in For Disabled Individuals

Retirement planning is the best way to make sure you have a comfortable life after your employment years. However, many disabled individuals don’t get enough retirement benefits to be able to make ends meet. As such, it’s essential to know which states are the best for disabled retirees.

Some of the best states for disabled individuals to retire in are Pennsylvania, Vermont, South Dakota, Florida, Nevada, Illinois, Mississippi, New Hampshire, South Dakota, Texas, Washington, and Wyoming. 

Read below to find out what makes these states the best for disabled people to retire in.

What Factors Make a State Better for Disabled Retirees?

Disability affects people in different ways, but by comparing data across many different factors, a person can get a better idea of how effectively their unique needs will be met in each state. There are four main types of considerations:

• Current Economic Conditions: Considerations such as average earnings, unemployment rates, and availability of particular no-cost job-search resources
• Affordability: Refers to a number of factors, including the price of housing, the average cost of living, and the minimum wage required to maintain a certain standard of living in a certain state. 
• Livability: The ease with which residents can get around throughout the state and the degree to which a sense of community can be found there.
• Medical Care: Cost and accessibility of health care, as well as the number of programs, like Medicaid, that help people with disabilities.

A higher ranking reflects an overall better result across all four areas, making that location more preferable for people with disabilities.

The Best States to Retire in For Disabled Individuals

This section contains a list of the best states to retire in for disabled people based on metrics like affordability, livability, and medical care. These are also the best states for disabled veterans to retire in.

Pennsylvania

Pennsylvania tops our list as the best place to retire if you have a disability. 

When it comes to how easily accessible public transportation is in the state’s major cities, Pennsylvania comes out at the top. Pennsylvania is also one of the most walkable states in the US, making it a great place to go if you’re looking to get some exercise and breathe some fresh air. 

The majority of residents who are disabled also have health insurance, with many having coverage for themselves and their families. The percentage of people with disabilities who reported that they have always been unable to afford health care is relatively low, with most people reporting that they have always been able to afford medical care.

Vermont

The state of Vermont comes in at number two on our list of the best states for those living with disabilities. In Vermont, almost all people who have a disability are covered by some sort of medical insurance. 

Very few residents in Vermont find healthcare to be inaccessible, despite the fact that their average annual earnings are quite low, and the cost of disability-related healthcare is relatively high.

North Dakota

The economic and affordability conditions of North Dakota make an excellent case for disabled people looking to move to this state. North Dakota has a very low unemployment rate, and most people with disabilities are able to join the workforce in some capacity. North Dakota also has the most Ticket to Work centers, which offer free employment programs to people who receive Social Security disability payments.

The median income of $26,596 ranks ninth highest, while the poverty rate for people with disabilities is the 17th lowest at 18%. North Dakota is also known for its low cost of living. Monthly housing costs are really low at $836, while the minimal wage required to maintain a basic standard of living is $13. 

Tax-Friendly States for Disabled Retirees

Taxation is a big concern for many people retiring on Social Security disability benefits. However, there are states where taxation is relatively low and retirement benefits are exempt.

Florida

Many are familiar with Florida’s pleasant winter climate and beautiful beaches. Florida has a mild climate, but that’s not the only benefit of retiring there. 

Due to the lack of a state income tax, retirees who continue working part-time can keep more of their hard-earned money. This also means that your pension or Social Security check will not be subject to state taxes.

If your home is worth the state’s median value of $182,400 in 2023, you can expect to pay a property tax bill of $1,773 per year in Florida. The state sales tax rate is 7.02%. Some cities and towns may charge an extra sales tax.

Illinois

Although there is an income tax in Illinois, several forms of retirement income are exempt. When calculating their federally adjusted gross income, retirees can deduct their Social Security and pension income. This includes income from employee-defined benefit plans, IRAs, SEPs, government retirement plans, and military service retirement plans.

Nonetheless, retirees may be subject to taxation in other ways. The taxes on real estate are quite expensive. In Illinois, the annual median property tax on a home valued at $202,200 is $3,507. In addition to the standard 6.25% sales tax, many states also throw in a sales tax at the local level.

Mississippi

State income taxes in Mississippi do not apply to a wide variety of retirement incomes. Payments received from Social Security and pensions, including those received from public and private pensions, as well as withdrawals from IRAs and 401(k) plans, are deducted or excluded from Mississippi’s taxable state income. 

Property taxes in the state are also among the lowest in the country. For a house worth $98,000, the average real estate tax in Mississippi is $508 per year. However, retirees in Mississippi should be aware of the comparatively high 7% state sales tax.

Nevada

Nevada’s casinos and vibrant nightlife may be what initially drew you there, but the state’s relatively low tax rates may ultimately be what convinces you to stay. 

Since Nevada does not have a state income tax, you do not need to be concerned about being subject to taxes at the state level on the money you earn through retirement employment, whether it be a part-time job or the income you receive from Social Security or a pension.

The tax burden on property is likewise relatively low. A home that is valued at the median amount in Nevada, which is $207,600, will have an annual property tax bill of $1,749. The state sales tax rate is 6.85%, though, so that’s a downside.

New Hampshire

The state of New Hampshire does not impose an income tax on benefits received from Social Security, pensions, payouts from retirement accounts, or money earned from a retired job by residents of the state. 

New Hampshire exclusively taxes dividends and interest payments. Because there is no state sales tax, retirees can enjoy tax-free purchases. Property taxes, however, are among the most expensive in the United States. 

South Dakota

South Dakota is yet another state without an income tax. Income from sources like Social Security, pensions, retirement accounts, and even some part-time work is exempt from state taxation for retirees. 

The state of South Dakota does, however, impose taxes on both sales and property. South Dakotans pay an annual median of $1,620 in property taxes on a median-valued home of $126,200. While South Dakota has one of the lowest state sales taxes in the country, at only 4.2%, local governments may impose their taxes on top of that.

Tennessee

The state of Tennessee does not impose a tax on income received from Social Security or pensions, nor does it tax earnings from employment. In Tennessee, the only forms of income that are subject to taxation are dividends and interest; however, taxpayers who are 65 or older and make less income are exempt from this tax. 

Property taxes are also inexpensive. home worth $137,300 has an annual median property tax rate of $933. However, keep in mind that there is a 7% sales tax.

Texas

Texas doesn’t have a state income tax, so retirees don’t have to worry about paying taxes on their Social Security retirement income, pension payments, or 401(k) and IRA withdrawals. However, there are other methods by which the state brings in revenue. In many areas of the state, the amount of money paid in property taxes can be quite high.

A home in Texas that is worth the median value of $125,800 will have an annual property tax bill of $2,275. In addition, a sales tax of 6.25% is applied to most purchases.

Washington

There is no state income tax in Washington, so residents don’t have to worry about having to pay a significant amount of money to the state for their share of the income they earn from sources such as Social Security, retirement account distributions, pensions, or a post-retirement job.

But you will have to pay taxes on your property. A home that is valued at the median amount of $287,200 will have an annual property tax bill of $2,631. Many purchases are subject to an additional sales tax of 6.5%.

Wyoming

There is no income tax in the state of Wyoming. This means you won’t have to pay taxes on any money you bring into the state, whether from work or retirement. The state sales tax is only 4%, so retirees won’t have to worry about paying a lot of money in taxes when they make a purchase. 

And if you own a home, you won’t have to pay a lot in property taxes. For a home with a median value of $184,000, the annual median property tax in Wyoming is $1,058.

Conclusion

Now you know that there are certainly some states that are better than others when it comes to living on your SSDI payments or planning your retirement. However, it’s important to make sure you report any changes concerning your living situation to your local Social Security Administration office.