MITCHELL, S.D. (MITCHELLNOW) A new study has revealed the states with the most disposable income, considering the cost of living in each state.
• South Dakota has been named the sixth most affordable state to live in, achieving an impressive purchasing power score of 84.8 out of 100.

A new study has revealed the states with the most disposable income – South Dakota ranks among the top ten states with the highest purchasing power after cost-of-living adjustments.

The study, conducted by QR Code Generator, utilized state-by-state economic data from the Bureau of Economic Analysis (BEA) and the Missouri Economic Research and Information Center. The research analyzed each state’s average annual disposable income (a person’s income after taxes) and the cost-of-living index to create a ranking of states by purchasing power. Each state received a purchasing power score on a scale of 100.

The cost-of-living index is standardized at 100, representing the national average. Scores above or below 100 indicate a state’s cost of living relative to this average. For instance, a score of 90 means the cost of living is 10% lower than the national average.

South Dakota has been named the sixth most affordable state in America, with an overall purchasing power score of 84.8 out of 100. The state offers a slightly above-average annual disposable income of $64,656, a respectable $4,357 more than the national average. Additionally, its 2.4% below average cost of living means salaries can stretch further than in other states.

Ranking in first place, residents of Wyoming have the strongest purchasing power in the US, with a top score of 100 out of 100. The state has a high annual disposable income of $69,039, the eighth highest in the country and over $9,000 higher than the national average.

What’s more, Wyoming has a relatively low cost of living, ranking among the cheapest 50% of states. This combination of factors makes Wyoming the state with the best purchasing power.

North Dakota has the second-best purchasing power, scoring 99.3 out of a possible 100. The cost of living in North Dakota is reasonably low, with an index score of just 92.8, compared with the national average of 100. Additionally, the average annual disposable income in North Dakota is $67,093, making it another state where salaries stretch further.

Colorado ranked third, with a purchasing power score of 89.3 out of 100. Despite a slightly above-average cost of living at 101.8, the state’s high average annual disposable income of $69,353 secures its position firmly in the top five.

With a purchasing power score of 86.1, fourth place goes to the state of Illinois, where the average annual disposable income is $62,317. Although this is lower than in other states, the cost of living in Illinois is also 6.7% lower than the US average.

In fifth place, Minnesota received an overall purchasing power score of 85.2 out of 100, thanks to its impressively low cost of living. While the state’s average annual disposable income is only $2,664 above the national average, its lower cost of living score of 94.8 allows Minnesotans to enjoy a higher quality of life.

South Dakota ranks sixth with an overall purchasing power score of 84.8 out of 100. The state offers a slightly above-average annual disposable income of $64,656, a respectable $4,357 more than the national average. Additionally, its 2.4% below average cost of living means salaries can stretch further than in other states.

In seventh place is Texas, where a relatively low average disposable income is offset by an even lower cost of living. On average, residents receive an annual disposable income of $59,422. However, the state still scored an impressive 83.7 for overall purchasing power, mainly due to its cost of living being nearly 10% below the national average, with an index score of 90.3.

Eighth in the ranking is Nebraska, where the average resident has an annual disposable income of $61,114 – 1.35% above the national average. In addition, the cost of living in Nebraska is 6.6% lower than the average state.

Connecticut ranks ninth and stands out from the rest of the list. Despite a high cost of living, averaging over 13% more than the national average, the state’s formidable average annual disposable income of $73,888 propels it into the top ten. In fact, Connecticut residents are the second-highest earners in the US.

Rounding out the top ten is Kansas, where residents enjoy an incredibly low cost of living: 12.7% lower than the average US state. This, combined with an annual disposable income barely 5.6% lower than average, means that Kansas residents are able to live well from their wages.

States with the highest disposable income (adjusted to cost of living):
Rank State Annual Disposable Income Cost of Living Index Score Purchasing Power Score (Out of 100)
1 Wyoming $69,039 95.1 100.0
2 North Dakota $67,093 92.8 99.3
3 Colorado $69,353 101.8 89.3
4 Illinois $62,317 93.3 86.1
5 Minnesota $62,963 94.8 85.2
6 South Dakota $64,656 97.6 84.8
7 Texas $59,422 90.3 83.7
8 Nebraska $61,114 93.4 82.8
9 Connecticut $73,888 113.2 82.5
10 Kansas $56,940 87.3 82.3

On the other end of the scale, the study also revealed the states where residents have the least disposable income, with the island state of Hawaii taking the number one spot.

Ranking as the state with the worst purchasing power, Hawaii scored 0 out of 100 overall. This is due to its distinctly average annual disposable income of $57,427, which cannot compete with a cost of living that is more than 86% higher than the average state’s.

In second place, although notably better than Hawaii, South Carolina has a pitiful purchasing power score of just 32.5 out of 100. The state suffers from both a high cost of living – 13.4% above average – and a low annual disposable income of just $50,345.

California ranks third, scoring a dismal 38.9 out of 100 for purchasing power. Despite earning 16.6% more than the average state, with an average annual disposable income of $68,267 a year, the cost of living in California is a staggering 45% higher than the national average. This means that although residents earn more than in other states, their money doesn’t stretch as far.

In fourth place, Arizona scored 46.1 out of 100 for purchasing power. Residents suffer from a slightly above-average cost of living, at 110.5, and a disposable income that is around 2.9% below the national average.

Oregon has the fifth lowest adjusted disposable income, with a score of 46.4 out of 100. The average annual disposable income per capita is 0.64% above the national average, a respectable $57,306. However, this isn’t enough to combat the cost of living, with Oregonians paying more than 14% more to live in the state.

In sixth place is Mississippi, with an overall purchasing power score of 46.7. Residents in Mississippi benefit from a cost of living that is 11.7% below the national average. However, the state’s disposable income is the lowest in the country, at just $44,436 annually, meaning the cost of living is, unfortunately, still too high for many.

The state with the seventh-worst disposable income is Maine, where an average income combined with an above-average cost of living means the state scored just 47.7 out of 100 for purchasing power. Maine’s average disposable income is less than 1% below the US average, but the cost of living is 11.3% over the national average, making it difficult for Maine residents to afford necessities.

In eighth place, Massachusetts residents face a purchasing power score of just 49.5 out of 100. While the state’s average disposable income is a substantial $74,342 annually, it is significantly offset by a 44.3% increase in the cost of living compared to the US average.

Vermont ranks ninth, with a nearly average annual disposable income of $59,330, but the cost of living is 14.7% above the national average, resulting in a low overall purchasing power score of 50 out of 100.

Rounding out the bottom ten states for disposable income, Idaho residents have a below-average annual disposable income of $52,950 – 7.5% below the national average.

States with the lowest disposable income (adjusted to cost of living):
Rank State Annual Disposable Income Cost of Living Index Score Purchasing Power Score (Out of 100)
1 Hawaii $57,427 186.2 0.0
2 South Carolina $50,345 113.4 32.5
3 California $68,267 145 38.9
4 Arizona $55,333 110.5 46.1
5 Oregon $57,306 114.1 46.4
6 Mississippi $44,436 88.3 46.7
7 Maine $56,489 111.3 47.7
8 Massachusetts $74,342 144.3 49.5
9 Vermont $59,330 114.7 50.0
10 Idaho $52,950 101.1 51.6