Income of the Aged Chartbook, 1996

 

Size of total income, 1996

The aged are an economically diverse group

Median income for all aged units is $16,099, but there are wide differences within the total group. About 19% have an income of under $8,000 (compared to the 1996 poverty threshold of $7,525 for one person aged 65 or older), and 10% have an income of $50,000 or more.

Bar chart linked to data in table format.

Median income, by marital status, race, and Hispanic origin, 1996

Demographic differences are associated with different levels of income

Income is highest for married couples, who have median income more than twice that of nonmarried men, and more than 2½ times that of nonmarried women. Whites have a median income more than 75% greater than blacks, and more than 90% greater than Hispanics.

Median income, 1996
Bar chart showing median income by marital status: married couples, $27,944; nonmarried men, $13,733; and nonmarried women, $10,483. By race: white, $16,954; black, $9,649; and Hispanic, $8,854.
*Persons of Hispanic origin may be of any race.

Poverty status, by marital status, race, and Hispanic origin, 1996

Nonmarried and minority aged have high proportions who are poor or near poor

The variations in income by marital status and by race are reflected in the poverty rates (based on family income of aged persons to conform with official measures of poverty) for these subgroups of the aged. Nonmarried men, nonmarried women, and minorities have the highest poverty rates, ranging from 13% to 25%. When the near poor (defined as having income between the poverty line and 125% of the poverty line) are included, the rates for the nonmarried and nonwhites range from 23% to 37%.

Percent of persons
Bar chart linked to data in table format.
*Persons of Hispanic origin may be of any race.

Median income, by age, 1996

Income differences by age are due in part to marital status differences

In every successively older age group, median income is lower. The striking differences by age shown in the following chart are due in part to the disproportionate number of nonmarried women in older age groups. The table below shows that in every age group, nonmarried women have a lower median income than nonmarried men or married couples. It also shows that nonmarried women far outnumber the others in the older age groups

Median income and percent of units, by age, sex, and marital status
Sex and marital status 65–69 70–74 75–79 80–84 85 or older
Median income (in thousands)
Married couples 32,988 27,880 24,655 24,633 23,373
Nonmarried men 15,101 14,313 14,106 13,025 10,928
Nonmarried women 11,630 11,325 10,294 10,171 9,417
Percent of units
Total number (in thousands) 6,681 6,286 5,317 3,555 2,713
Total percent 100 100 100 100 100
Married couples 51 45 36 30 17
Nonmarried men 14 15 15 16 20
Nonmarried women 35 40 49 54 63
 
Median income, by age
Bar chart showing median income by age: age 65 to 69, $20,893; age 70 to 74, $17,922; age 75 to 79, $14,985; age 80 to 84, $13,503; and age 85 or older, $11,251.

Poverty status, by age, 1996

The oldest age group has the highest poverty rate

In addition to the lower median income of older age groups, poverty rates are often higher for those who are older. As with income, the large proportion of nonmarried women in the older age groups contributes to the difference in poverty rates by age. The table below shows that nonmarried women are more likely than married persons to be poor or near poor in every age group.

Poverty status, a by ages, sex, and marital status
Age Married
persons
Nonmarried
men
Nonmarried
women
Percent poor
65–69 4 13 19
70–74 4 10 18
75–79 5 11 21
80–84 5 17 20
85 or older 5 15 21
Percent poor or near poor b
65–69 8 24 30
70–74 8 24 30
75–79 9 16 35
80–84 10 24 33
85 or older 9 27 34
a. Based on family income of aged persons to conform with official measures of poverty.
b. The near poor are defined as having income between the poverty line and 125% of the poverty line.
Bar chart linked to data in table format.

Sources of income, 1996

Social Security is a source of income for nearly all the aged

More than 9 out of 10 aged units receive Social Security benefits. Asset income is the next most common source of income, received by nearly two-thirds of the aged. Less than half (41%) receive pensions other than Social Security, and only 21% have earnings. Public assistance is received by 6% and veterans' benefits by only 5%.

Bar chart linked to data in table format.
*Includes private pensions and annuities, government employee pensions, Railroad Retirement, and IRA, Keogh, and 401(k) payments.

Percent of income from Social Security, 1996

Social Security provides at least half of total income for a majority of beneficiaries

Social Security pays benefits to more than 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 almost one-third of the beneficiaries, and is the only source of income for 18% of them.

Pie chart showing Social Security provides less than 50% of income for 34% of beneficiaries; 50-89% for 36%; 90-99% for 12%; and 100% of income for 18% of beneficiaries.

Social Security's role in reducing poverty, by marital status and race, 1996

Social Security plays a pivotal role in reducing poverty

Although there are aged beneficiaries with family income below the poverty line (based on family income of aged persons to conform with official measures of poverty), the poverty rate would be much higher if they did not have Social Security benefits. Nine percent of aged beneficiaries are poor, and 41% are kept out of poverty by their Social Security benefits—so that the total poverty rate without Social Security would be 50%. Although poverty rates vary considerably by marital status and race, the proportion kept out of poverty by their Social Security benefits is about 40% for all groups.

Bar chart linked to data in table format.

Size of income, by receipt of asset income, 1996

Receipt of asset income is associated with relatively high median income

The median income of those with asset income is more than twice as large as that of those with no asset income ($22,097, compared to $9,375). Aged units with no asset income are concentrated in the lowest income categories—54% have a total income below $10,000 and only 6% have an income of $30,000 or more. Among aged units with asset income, 14% have a total income of less than $10,000 and one-third have an income of $30,000 or more.

Size of total income (in thousands)
Two pie charts linked to data in table format.

Median income, by receipt of earnings and retirement benefits, 1996

Receipt of earnings and retirement benefits also affects income size

About 7% of aged units have no retirement benefits. Of these, 38% have earnings; their median income is $33,638. Sixty-two percent have no earnings, and their median income is only $490. In the absence of earnings, median income rises markedly with the number of retirement benefits received, from $10,054 with one retirement benefit to $23,164 with two or more. For units with both earnings and retirement benefits, median incomes are $26,982 for those with one retirement benefit and $37,996 for those with more than one.

Bar chart linked to data in table format.

Receipt of income from earnings and pensions, by age, 1996

Age groups differ in their likelihood of receiving earnings and pensions

Earnings are much more common in the youngest age group than in the oldest group—39%, compared to 4%. Private pensions and other pensions are also more common among the younger groups than the older ones. For the youngest group, earnings are a more common source of income than are either private or other pensions. Among the older cohorts, private pensions are a more common source of income than are earnings or other pensions.

Bar chart linked to data in table format.

Receipt of income, by source, race, and Hispanic origin, 1996

Receipt of income from major sources varies by race and Hispanic origin

Among the aged, whites and blacks are somewhat more likely than Hispanics to receive Social Security. Whites are much more likely than blacks or Hispanics to receive income from assets and from pensions. The groups are about equally likely to have earnings. Minority aged units are much more likely to receive Supplemental Security Income (SSI) than are whites.

Bar chart linked to data in table format.
*Persons of Hispanic origin may be of any race.
**Includes private pensions and annuities, government employee pensions, Railroad Retirement, and IRA, Keogh, and 401(k) payments.

Share of income, by source, 1996

Social Security provides the majority of income for the aged

Money income for the population 65 or older comes largely from four sources. Social Security provides the largest portion—40%. Earnings, asset income, and pensions other than Social Security account for 20%, 18%, and 19%, respectively. Only 3% comes from other sources.

Pie chart described in previous paragraph.
*Includes private pensions and annuities, government employee pensions, Railroad Retirement, and IRA, Keogh, and 401(k) payments.

Share of income, by source and income level, 1996

The share supplied by each income source differs greatly by income level

Aged units are ranked by total income and divided into five groups of equal size called quintiles. In the following chart, shares of income of the quintile with the lowest income are compared with those of the quintile with the highest. Social Security benefits provide 81% of the total income for those in the lowest income quintile, and public assistance provides the second largest share (11%). For those in the highest income quintile, earnings provide the highest share of income (31%) and income from assets is the next most important (25%). Social Security and pensions are 21% each. The table below details the shares in the intermediate income quintiles, as well as those in the lowest and highest.

Shares of income by quintiles of total income
Source Lowest Second Third Fourth Highest
Social Security 81 80 66 47 21
Pensions a 3 7 15 24 21
Asset income 3 6 9 15 25
Earnings 1 3 7 12 31
Public assistance 11 2 1 b b
Other income 1 2 3 2 2
NOTE: Percents may not sum to 100 due to rounding.
a. Includes private pensions and annuities, government employee pensions, Railroad Retirement, and IRA, Keogh, and 401(k) payments.
b. Less than 0.5%.
Shares of income for aged units in the lowest and highest income quintiles
Two pie charts representing data from previous table.
*Includes private pensions and annuities, government employee pensions, Railroad Retirement, and IRA, Keogh, and 401(k) payments.

Change in median income since 1962

Median real income has risen substantially over the years

Between 1962 and 1996, the income of the aged increased—even when adjusted for inflation. The increase was 88% for married couples and 93% for nonmarried persons. The table below and the following chart show that between 1967 and 1996, the income of married couples increased by 76%, and that of nonmarried persons increased by 84%. There were disproportionate increases by race—the income of whites increased by 90% between 1967 and 1996, that of blacks by 53%.

Median income in 1996 dollars, by marital status and race, selected years
Year Marital status Race
Married
couples
Nonmarried
couples
White Black
1962 14,887 5,851 . . . . . .
1967 15,845 6,135 8,935 6,314
1971 20,757 7,938 12,575 7,334
1976 21,756 9,265 13,622 8,245
1978 22,765 9,409 14,342 7,821
1980 22,888 9,102 14,129 7,731
1982 24,600 9,560 15,365 7,772
1984 26,049 10,103 16,551 8,260
1986 27,042 10,279 16,864 8,518
1988 26,930 10,515 17,397 8,360
1990 28,033 10,981 17,457 8,388
1992 26,635 10,684 16,802 8,346
1994 26,515 11,016 16,887 9,288
1996 27,944 11,302 16,954 9,649
NOTE: . . . = not available.
Change in median income
Line chart representing data from previous table.
*In 1996 dollars

Change in income sources since 1962

Receipt of Social Security has become nearly universal since 1962

In 1962, 69% of the aged received Social Security benefits; by 1996, 91% of them did. As shown in the table below and the following chart, most of that increase occurred in the 1960's. 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, dropped slightly in 1996. The proportion with earnings has declined since 1962, and since 1982 has been about 21%. The proportion receiving public assistance has also declined, and in recent years has been about half of its 1962 level.

Sources of income, selected years (percent)
Year Social
Security
Asset
income
Pensions a Earnings Public
assistance
1962 69 54 18 36 14
1967 86 50 22 27 12
1971 87 49 23 31 10
1976 89 56 31 25 11
1978 90 62 32 25 9
1980 90 66 34 23 10
1982 90 68 35 22 8
1984 91 68 38 21 9
1986 91 67 40 20 7
1988 92 68 42 22 7
1990 92 69 44 22 7
1992 92 67 45 20 7
1994 91 67 42 21 6
1996 91 63 41 21 6
a. Includes private pensions and annuities, government employee pensions, Railroad Retirement, and IRA, Keogh, and 401(k) payments.
Change in sources of income
Line chart representing data from previous table.
*Includes private pensions and annuities, government employee pensions, Railroad Retirement, and IRA, Keogh, and 401(k) payments.

Change in shares from sources since 1962

Social Security continues to provide the largest share of total income for the aged

The share of income provided by Social Security increased by about one-fourth between 1962 and 1980, and since then has accounted for about 40% of the total. The share from asset income increased for about 20 years, but has been declining since the mid-80's. The share from pensions more than doubled, reaching 19% in 1996, while the share from earnings declined nearly 30% over the period.

Shares of income from various sources, selected years (percent)
Year Social
Security
Asset
income
Pensions a Earnings Other
1962 31 16 9 28 16
1967 34 15 12 29 10
1976 39 18 16 23 4
1978 38 19 16 23 4
1980 39 22 16 19 4
1982 39 25 15 18 3
1984 38 28 15 16 3
1986 38 26 16 17 3
1988 38 25 17 17 3
1990 36 24 18 18 3
1992 40 21 20 17 3
1994 42 18 19 18 3
1996 40 18 19 20 3
a. Includes private pensions and annuities, government employee pensions, Railroad Retirement, and IRA, Keogh, and 401(k) payments.
Change in shares of income
Line chart representing data from previous table.
*Includes private pensions and annuities, government employee pensions, Railroad Retirement, and IRA, Keogh, and 401(k) payments.