Income of the
- The average income of an elderly
individual (age 65 or older) in the United States in 1999
was $20,714, up from $12,239 in 1974, based on Employee
Benefit Research Institute (EBRI) tabulations of data
from the March 2000 Current Population Survey (CPS).
- The percentage of the elderly's
income derived from Social Security has fluctuated over
time. It declined from 42.0 percent in 1974 to 38.6
percent in 1989. It increased to 44.4 percent in 1994 and
declined to 40.1 percent in 1999. In 1999, the average
income received from Social Security by an elderly person
- Income from pensions and annuities
accounted for a steadily increasing share of the
elderly's income from 1974 to 1999. In 1974, these
sources accounted for 14.0 percent of the elderly's
income; by 1999, that percentage had increased to 19.4
percent. The average amount an elderly person received in
income from pensions and annuities was $4,016 in 1999.
- Income from assets increased
between 1974, when it accounted for 18.2 percent of the
elderly's income, and 1984, when it accounted for 28.2
percent. It declined to 17.6 percent in 1994 and
increased to 19.8 percent in 1999. In 1999, the average
amount an elderly person received in income from assets
was $4,094. Assets here are defined as stocks and bonds
not held in a retirement account, income from rents,
royalties, and trusts.
- Income from personal earnings
declined as a percentage of the elderly's income from
21.3 percent in 1974 to 14.9 percent to 1994. In 1999,
income from earnings increased to 18.7 percent of the
elderly's income. In 1999, the average amount an elderly
person received in income from earnings was $3,907.
- The lower an elderly individual's
total income, the greater the percentage of it that comes
from Social Security. In 1999, Social Security accounted
for 91.4 percent of the total income of elderly
individuals in the lowest income quintile, compared with
20.7 percent for those in the highest income quintile.
- The income quintiles are derived by
assigning all individuals ages 65 and older to one of
five groups based on income, so that there is an equal
number of individuals in each group. The income ranges of
the quintiles vary from year to year. In 1999, the lowest
income quintile consisted of elderly individuals with an
annual income of $6,785 or less. The highest income
quintile consisted of individuals with a 1999 income of
$26,899 or more.
- There was a significant difference
between the average income of elderly men ($28,240) and
that of elderly women ($15,136) in 1999. This is in part
attributable to a greater lifetime attachment to the work
force among the generation of men that currently
constitutes the elderly. Given the increasing role of
women currently in the work force, the income gap between
the sexes is expected to narrow.
- Elderly women derived a greater
share of their income from Social Security and assets
than men in 1999: Social Security accounted for 48.4
percent of elderly women's income, compared with 33.9
percent of elderly men's income. Income from assets
accounted for 23.5 percent of elderly women's income,
compared with 17.1 percent of elderly men's.
- Elderly men derived a larger share
of their income from employment-based sources, including
pensions and annuities and earnings, than elderly women.
In 1999, pensions and annuities accounted for 22.4
percent of elderly men's income, compared with 15.3
percent of elderly women's. Income from earnings
accounted for 24.4 percent of elderly men's income,
compared with 11.1 percent of elderly women's.
- These data are from the March
supplement to the U.S. Census Bureau's Current Population
Survey (CPS). Some research, using data from the Bureau
of Economic Analysis' National Income and Product
Accounts, and from the Internal Revenue Service,1
has shown that the CPS underestimates the percentage of
the elderly's income that comes from employment-based
1/For a more detailed discussion
of this point, see Silvester J. Schieber, Why Do Pension
Benefits Seem So Small? (Washington, DC: Watson Wyatt
For more information, contact Ken
McDonnell (202) 775-6342 or firstname.lastname@example.org.
Source: Employee Benefit Research
Institute tabulations of data from the March 2000 Current