Table of Contents
- Definitions and Notes
- Income Sources
- Percentage receiving income from specified source
- Percentage receiving Social Security benefits, by relative importance of benefits to total income
- Percentage receiving income from earnings and pensions, by age
- Percentage receiving income from major sources, by race and Hispanic origin
- Change in percentage receiving income from major sources
- Total Money Income
- Percentage with various levels of income
- Percentage with various levels of income, by receipt of asset income
- Median income, by receipt of earnings and retirement benefits
- Median income and percentage distribution of aged units, by age, marital status, and sex of nonmarried persons
- Median income, by age
- Median income, by marital status, sex of nonmarried persons, race, and Hispanic origin
- Change in median income, by marital status and race
- Shares of Aggregate Income
- Shares of aggregate income, by source
- Shares of aggregate income for the lowest and highest income quintiles, by source
- Change in shares of aggregate income, by source
- Poverty Status, Based on Family Income
- Poverty status, by marital status, sex of nonmarried persons, race, and Hispanic origin
- Poverty status, by age
Definitions and Notes
Retirement benefits include Social Security, other public sources such as Railroad Retirement and government employee pensions (military, federal, state, and local), and private pensions and annuities.
Social Security includes retired-worker benefits, dependents' or survivors' benefits, disability benefits, transitionally insured benefits, and special age-72 benefits.
Pensions include private pensions and annuities; government employment pensions; Railroad Retirement; and individual retirement account, Keogh, and 401(k) payments.
Total money income is the sum of all income received by the aged unit before any deductions such as those for taxes, union dues, or Medicare premiums. Total money income does not reflect nonmoney transfers such as food stamps, health benefits, subsidized housing, payments in kind, or fringe benefits from one's employment.
Aggregate income is the sum of the total money income of all aged units in the population of interest. Several charts in this book present the shares of aggregate income attributable to specific sources, such as Social Security.
Beginning with data for 2002, respondents may identify themselves in more than one racial group. The White Alone and Black Alone categories reflect respondents who reported only one race.
All years are calendar years.
Nonmarried men and nonmarried women include persons who are separated or married but living apart from their spouse.
Persons of Hispanic origin may be of any race.
Percentages may not sum to 100 because of rounding.
- Social Security is a source of income for nearly all of the aged.
- Social Security provides at least half of total income for a majority of beneficiaries.
- Age groups differ in their likelihood of receiving earnings, but not pensions.
- Receipt of income from major sources varies by race and Hispanic origin.
Social Security is a source of income for nearly all of the aged. Nine out of 10 aged units receive Social Security benefits. Asset income is the next most common source of income, received by more than half of the aged. Two-fifths receive retirement benefits other than Social Security, and only one-fifth have earnings. Public assistance is received by 5% and veterans' benefits by only 4%.
Social Security provides at least half of total income for a majority of beneficiaries. Social Security pays benefits to 90% of those aged 65 or older. It is the major source of income (providing 50% or more of total income) for 66% of the beneficiaries. It contributes 90% or more of income for one-third of the beneficiaries and is the only source of income for 22% of them.
Aged groups differ in their likelihood of receiving earnings, but not pensions. Earnings are much more common in the youngest group than in the oldest group—45% compared with 6%. In all age groups, there is little or no difference in the likelihood of having public or private pensions.
Receipt of income from major sources varies by race and Hispanic origin. Among the aged, whites are most likely to receive Social Security and pensions, followed by blacks and Hispanics. Whites are much more likely than blacks or Hispanics to receive income from assets. Whites are slightly more likely to have earnings than are blacks or Hispanics. Minority aged units are much more likely to receive Supplemental Security Income (SSI) than are whites.
Receipt of Social Security has become nearly universal. In 1962, 69% of the aged received Social Security benefits; in 2002, 90% of them did. Most of that increase occurred in the 1960s. Receipt of other pension income, which more than doubled from 1962 to 1992, has decreased slightly since then. The proportion of aged units with asset income, which had been about two-thirds since 1980, has dropped since 1990. The proportion with earnings has declined since 1971 and has been between 20% and 22% since 1982. The proportion receiving public assistance has also declined and is now about a third of its 1962 level.
Total Money Income
- The aged are an economically diverse group.
- Income differences by age are associated with differences in marital status.
- Demographic differences are associated with different levels of income.
- Median real income has risen substantially over the years.
The aged are an economically diverse group. The median income for all aged units is $18,938, but there are wide differences within the total group. Twenty-one percent have an income of under $10,000, and 15% have an income of $50,000 or more.
Receipt of asset income is associated with relatively high median income. The median income of aged units with asset income is more than twice that of those with no asset income ($27,034 compared with $12,444). Aged units with no asset income are concentrated in the lowest income categories—36% have a total income below $10,000, and only 14% have an income of $30,000 or more. Among aged units with asset income, 9% have a total income of less than $10,000, and 45% have an income of $30,000 or more.
Receipt of earnings and retirement benefits also affects total income. About 8% of aged units have no retirement benefits. Of those, 41% have earnings, and their median income is $33,309; 59% have no earnings, and their median income is only $25. In the absence of earnings, median income rises markedly with the number of retirement benefit types received, from $11,964 with one retirement benefit type to $25,818 with two. For units with both earnings and retirement benefits, median income is $37,560 for those with one retirement benefit type and $48,299 for those with two.
Income differences by age are associated with differences in marital status. Median income is generally lower in older age groups. The striking differences by age are due in part to the disproportionate number of nonmarried women in older age groups. In every age group, nonmarried women have a lower median income than nonmarried men or married couples.
|Marital status and sex of nonmarried persons||65–69||70–74||75–79||80 or older|
|Median income (dollars)|
|Percentage distribution of aged units|
|Total number of aged units (thousands)||6,550||6,359||5,758||7,553|
Demographic differences are associated with different levels of median income. Income is highest for married couples, who have a median income about twice that of nonmarried men and more than 2½ times that of nonmarried women. Median income of whites is two-thirds greater than that of blacks and over three-fourths greater than that of Hispanics.
Median real income has risen substantially over the years. Between 1962 and 2002, the income of the aged increased even when adjusted for inflation. The increase was 90% for married couples and 96% for nonmarried persons. There were disproportionate increases by race. Between 1967 and 2002, the income of whites increased by 96%; that of blacks increased by 66%.
Shares of Aggregate Income
- Social Security provides the largest share of aggregate income for persons 65 or older.
- Shares of income from each source differ greatly by income level.
- Over time, Social Security has provided the largest share of aggregate income for the aged.
Social Security provides the largest share of income for the aged. Aggregate income for the aged population comes largely from four sources. Social Security accounts for 39%, earnings for 25%, pensions for 19%, and asset income for 14%. Only 3% comes from other sources.
Shares of income from each source differ greatly by income level. Aged units are ranked by total money income and divided into five groups of equal size called quintiles. Persons in the lowest quintile have the largest share of income from Social Security benefits (83%), and public assistance provides the second largest share (9%). For those in the highest income quintile, earnings provide the largest share of income (38%). Pensions and Social Security (21% and 20%) are the next most important, followed by asset income (19%).
Over time, Social Security has provided the largest share of aggregate income for the aged. In 1962, it provided the largest share, followed closely by earnings. In 2002, Social Security continued to provide the largest share, but by a much wider margin compared with the other major sources of income. The share from asset income increased for over 20 years but has generally declined since the mid-1980s. The share from earnings has had the opposite pattern—declining until the mid-1980s and generally increasing since then. The share from pensions had doubled by the early 1990s but has since leveled off.
Poverty Status, Based on Family Income
- High proportions of nonmarried and minority aged are poor or near poor.
- The oldest age group (80 or older) has the highest poverty rate.
High proportions of nonmarried and minority aged are poor or near poor. The variations in family income by marital status and by race are reflected in the poverty rates for those subgroups of the aged. Nonmarried persons and minorities have the highest poverty rates, ranging from 14% to 24%. An additional 7% to 11% of nonmarried persons and minorities have incomes between the poverty line and 125% of the poverty line (the near poor).
The oldest age group has the highest poverty rate. In keeping with the lower median income of older age groups, those groups generally have higher rates of poverty 2nd near poverty(income between the poverty line and 125% of the poverty line).