Residents of Connecticut are leading the country in planning and saving for retirement this year, according to a study by A.G. Edwards.

A.G. Edwards created a Nest Egg Index to rate states based on their residents' personal savings and investing behavior. The index looks at a dozen factors, including participation in retirement savings plans, personal debt levels, and home ownership.

With a rating of 114.5 on the firm's Nest Egg Index, Connecticut surpassed New Jersey (113.21) for this year's top spot in the state ranking. The firm says Connecticut showed improvement in the saving and investing categories, as well as reduced levels of personal debt for its residents.

The other states in the top five are Minnesota (112.59), Massachusetts (112.19) and Maryland (111.59). The national average is 100. You can find the ranking of all 50 states near the bottom of this article.

The index ranked local communities as well. For the second straight year, Los Alamos, New Mexico, topped the list of cities with a rating of 134.83. San Jose-Sunnyvale-Santa Clara, California, placed second, with a rating of 127.61. Bridgeport-Stamford-Norwalk, Connecticut, placed third with a rating of 125.15.

Ohio had the most communities in the top 500 list at 37, followed by Indiana (32), Pennsylvania (30) and Michigan (29). In addition, all 24 Wisconsin communities were ranked in the top 500. Only Arkansas, Louisiana, Mississippi, and Oklahoma had no communities represented in the top 500 rankings of this year's Nest Egg Index.

"When looking at the state rankings, we can see clearly that the Midwest continues to be the geographic area where more residents are actively working toward building their nest eggs," says A.G. Edwards Personal Finance Strategist Sophie Beckmann. "Americans as a whole may face external factors - such as economic and employment conditions - that can hinder the saving and investing process, but the traditional axioms of starting early and developing a disciplined approach to saving are personal choices investors make that help them in the end."

A.G. Edwards 2007 Nest Egg Index Ranking by State