Poor and Elderly: The 5 Worst States to Grow Old In

For anybody who reads a newspaper, watches TV news or knows a retiree, it should come as no surprise that it's a tough time to be growing old in America. But the situation is worse than you probably realize: According to a recent report, on average, if government benefits were taken out of the equation, elderly Americans would have significantly less income than they'd need to survive. And with a host of politicians proposing to scale back social programs, that gap is poised to become even more severe.

Doing Without: Economic Insecurity and Older Americans, a report released on March 1, uses the "Elder Index" -- an analysis of the average expenses of an elder household -- to gauge economic insecurity. Nationwide, the average income for an elderly household, minus government benefits, falls $5,228 short of its expenses -- about 28% of the average household budget.

But, while things are tough for the elderly across the country, they vary widely from state to state. In Massachusetts, for example, elderly households average a $10,248 yearly income shortfall -- almost 40% of their average expenses. By comparison, elderly households in Alaska almost break even -- on average, they fall short by just $1,068 per year, or about 4% of their total costs.

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By and large, the Northeast and Southeast -- both of which tend to have higher population density and higher general cost of living -- are harder places to grow old. On the flip side, the golden years tend to be easier, relatively speaking, in states with lower population densities and lower costs of living -- think Alaska, Montana and Utah.

So how do elderly households fill the gap between the money they need and the money they bring in? For many, the answer is Medicare and Social Security. According to Wider Opportunities for Women, the group that released the report, 25% of elderly households rely on Social Security for 98% or more of their household income. Put another way, the average household with at least one resident aged 65 or older derives 64.8% of its income from Social Security.

With this in mind, it's hardly surprising that spending on the elderly accounts for a massive portion of the federal budget. According to the Center on Budget and Policy Priorities, 53% of all money spent on entitlements in 2010 went to elderly households -- $519 billion on Medicare and $689 billion on Social Security.

That's a lot of money. On the other hand, in many elderly households, these federal programs are all that is keeping the wolves from the door. Bold pronouncements aside, the federal government -- and the politicians who hope to steer it -- have a complex problem to solve, and it won't be fixed by broad claims about entitlements that are "systematically destroying the

work ethic" of Americans.

(A chart ranking all 50 states and the District of Columbia appears after the gallery)

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Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at@bruce1971.