Income of the Aged Chartbook, 2004

Table of Contents

Definitions and Notes

Income Sources

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 regular payments from private pensions and annuities; government employee pensions; Railroad Retirement; and individual retirement accounts (IRAs), Keoghs, and 401(k) plans. Irregular withdrawals (lump-sum payments) from IRAs, Keoghs, and 401(k) plans are not included in the data because they do not fit the Census Bureau's definition of money income.

Income

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. Total money income does not include capital gains or losses, or irregular withdrawals (lump-sum payments) from IRAs, Keoghs, or 401(k) plans.

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.

General Notes

This publication covers the population aged 65 or older. The unit of analysis here, with the exception of measures of poverty, is the aged unit, which is a married couple living together or a person who does not live with a spouse. The age of a married couple is the age of the husband if he is 65 or older; if the husband is younger than 55 and the wife is aged 65 or older, the age of the married couple is the age of the wife. The race and Hispanic origin of a married couple are determined by the husband. The unit of analysis for poverty is persons aged 65 or older.

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.

Income Sources

Highlights
  • Social Security is a source of income for nearly all units aged 65 or older.
  • Social Security provides at least half of total income for a majority of beneficiary aged units.
  • 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 units aged 65 or older. Nearly 9 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 nearly one-quarter have earnings. Public assistance and veterans' benefits are each received by only 4%.

Percentage receiving income from specified source, 2004
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Table equivalent for chart. Percentage receiving income from specified source, 2004
Source of income Percent
Social Security 89
Asset income 55
Retirement benefits other than Social Security 41
Public and private 2
Public only 12
Private only 27
Earnings 24
Public assistance 4
Veterans' benefits 4
 

Social Security provides at least half of total income for a majority of beneficiary aged units. In 2004, 90% of married couples and 88% of nonmarried persons (aged 65 or older) received Social Security benefits. Social Security was the major source of income (providing at least 50% of total income) for 54% of aged beneficiary couples and 74% of aged nonmarried beneficiaries. It was the only source of income for 11% of aged beneficiary couples and 29% of aged nonmarried beneficiaries. Total income excludes withdrawals from savings and lump-sum payments from IRAs or 401(k)s; it also excludes in-kind support, such as food stamps and housing and energy assistance.

Percentage of aged beneficiary units receiving Social Security benefits, by relative importance of benefits to total income, 2004
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Table equivalent for chart. Percentage of aged beneficiary units receiving Social Security benefits, by relative importance of benefits to total income, 2004
Percent All beneficiary units Beneficiary married couples Nonmarried beneficiaries
50% or more of income 66 54 74
90% or more of income 34 21 43
100% of income 21 11 29
 

Aged groups differ in their likelihood of receiving earnings, but not pensions. Earnings are received by a greater percentage of aged units in the youngest group than in the oldest group—44% compared with 7%. In all age groups, there is little or no difference in the likelihood of having public or private pensions.

Percentage receiving income from earnings and pensions, by age, 2004
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Table equivalent for chart. Percentage receiving income from earnings and pensions, by age, 2006
Age Earnings Private pensions Public pensions
65–69 44 27 15
70–74 28 30 15
75–79 16 30 15
80 or older 7 30 13
 

Receipt of income from major sources varies by race and Hispanic origin. Among units aged 65 or older, 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.

Percentage receiving income from major sources, by race and Hispanic origin, 2004
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Table equivalent for chart. Percentage receiving income from major sources, by race and Hispanic origin, 2006
Major source of income White alone Black alone Hispanic
Social Security 91 83 76
Asset income 59 26 23
Pensions 43 28 20
Earnings 24 21 21
SSI 3 10 13
 

Receipt of Social Security has become nearly universal. In 1962, 69% of units aged 65 or older received Social Security benefits; in 2004, 89% 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 24% since 1980. The proportion receiving public assistance has also declined and is now about a third of its 1962 level.

Change in percentage receiving income from major sources, selected years
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Table equivalent for chart. Percentage receiving income from major sources, selected years
Year Social Security Pensions Asset income Earnings Cash public assistance
1962 69 18 54 36 13
1967 86 22 50 27 12
1971 87 23 49 31 10
1976 89 31 56 25 11
1978 90 32 62 25 10
1980 90 34 66 23 10
1982 90 35 68 22 8
1984 91 38 68 21 9
1986 91 40 67 20 7
1988 92 42 68 22 7
1990 92 44 69 22 7
1992 92 45 67 20 7
1994 91 42 67 21 6
1996 91 41 63 21 6
1998 90 43 63 21 5
2000 90 41 59 22 5
2001 91 40 58 22 5
2002 90 41 55 22 5
2004 89 41 55 24 4
 

Total Money Income

Highlights
  • 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 units aged 65 or older is $20,481, but there are wide differences within the total group. Eighteen percent have an income of under $10,000, and 17% have an income of $50,000 or more.

Percentage with various levels of income, 2004
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Table equivalent for chart. Percentage with various levels of income, 2004
Income (dollars) Percent
Less than 5,000 5
5,000 to 9,999 13
10,000 to 14,999 18
15,000 to 19,999 13
20,000 to 24,999 10
25,000 to 29,999 7
30,000 to 34,999 6
35,000 to 39,999 5
40,000 to 44,999 4
45,000 to 49,999 3
50,000 or more 17
 

Receipt of asset income is associated with relatively high median income. The median income of units aged 65 or older with asset income is more than twice that of those with no asset income ($28,844 compared with $13,243). Aged units with no asset income are concentrated in the lowest income categories—32% have a total income below $10,000, and only 16% have an income of $30,000 or more. Among aged units with asset income, 7% have a total income of less than $10,000, and 48% have an income of $30,000 or more.

Percentage with various levels of income, by receipt of asset income, 2004
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Table equivalent for chart. Percentage with various levels of income, by receipt of asset income, 2004
Income (dollars) With asset income Without asset income
Less than 10,000 7 32
10,000 to 19,999 25 37
20,000 to 29,999 20 14
30,000 or more 48 16
 

Receipt of earnings and retirement benefits also affects total income. About 8% of units aged 65 or older have no retirement benefits. Of those, 41% have earnings, and their median income is $40,000; 59% have no earnings, and their median income is $0. In the absence of earnings, median income rises markedly with the number of retirement benefit types received, from $12,672 with one retirement benefit type to $26,936 with two. For units with both earnings and retirement benefits, median income is $37,740 for those with one retirement benefit type and $53,249 for those with two.

Median income, by receipt of earnings and retirement benefits, 2004
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Table equivalent for chart. Median income, by receipt of earnings and retirement benefits, 2004
Receipt of retirement benefits With earnings With no earnings
No retirement benefits 40,000 0
One retirement benefit type 37,740 12,672
Two retirement benefit types 53,249 26,936
 
NOTE: Retirement benefit types are Social Security, Railroad Retirement, government pension, and private pension or annuity.

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.

Median income and percentage distribution of aged units, by age, marital status, and sex of nonmarried persons, 2004
Marital status and sex of nonmarried persons 65–69 70–74 75–79 80 or older
Median income (dollars)
Married couples 44,299 36,750 30,413 28,490
Nonmarried men 19,194 18,013 17,580 16,939
Nonmarried women 14,611 13,506 13,171 12,679
Percentage distribution of aged units
Total percent 100 100 100 100
Married couples 52 46 40 27
Nonmarried men 16 16 15 17
Nonmarried women 31 39 44 56
Total number of aged units (thousands) 7,078 5,999 5,827 7,960
 
Median income, by age, 2004
Bar chart showing median income by age: age 65 to 69, $28,969; age 70 to 74, $22,603; age 75 to 79, $19,290; and age 80 or older, $15,948.

Demographic differences are associated with different levels of median income for units aged 65 or older. 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 white aged units is nearly three-fourths greater than that of black aged units and over three-fourths greater than that of Hispanic aged units.

Median income, by marital status, sex of nonmarried persons, race, and Hispanic origin, 2004
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Table equivalent for chart. Median income, by marital status, sex of nonmarried persons, race, and Hispanic origin, 2004
  Income (dollars)
Marital status  
Married couples 34,900
Nonmarried men 17,611
Nonmarried women 13,151
Race  
White alone 21,699
Black alone 12,503
Hispanic 12,133
 

Median real income has risen substantially over the years. Between 1962 and 2004, the income of units aged 65 or older increased even when adjusted for inflation. The increase was 94% for married couples and 98% for nonmarried persons. There were disproportionate increases by race. Between 1967 and 2004, the income of whites increased by 102%; that of blacks increased by 64%.

Change in median income, by marital status and race, selected years
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Table equivalent for chart. Constant (2004) dollar median income, by marital status and race, selected years
Year Couples Nonmarried White Black
1962 19,192 7,543 -- --
1967 20,359 7,883 11,480 8,112
1971 26,671 10,199 16,158 9,423
1976 27,955 11,905 17,503 10,594
1978 29,251 12,090 18,428 10,049
1980 29,408 11,695 18,154 9,933
1982 31,608 12,284 19,742 9,986
1984 33,471 12,981 21,266 10,614
1986 34,747 13,207 21,668 10,945
1988 34,603 13,510 22,353 10,741
1990 36,020 14,109 22,431 10,777
1992 34,223 13,728 21,588 10,724
1994 34,069 14,154 21,699 11,934
1996 35,905 14,522 21,784 12,398
1998 37,322 14,860 23,444 11,643
2000 36,513 14,886 23,169 14,439
2001 37,101 14,793 22,759 14,080
2002 36,375 14,781 22,529 13,447
2004 37,246 14,940 23,158 13,344
NOTE: -- = not available.

Shares of Aggregate Income

Highlights
  • Social Security provides the largest share of aggregate income for units aged 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 aged units.

Social Security provides the largest share of aggregate income for units aged 65 or older. Aggregate income for the aged population comes largely from four sources. Social Security accounts for 38.6%, earnings for 26.3%, pensions for 19.7%, and asset income for 12.6%. Only 2.7% comes from other sources.

Shares of aggregate income, by source, 2004
Pie chart described in previous paragraph.

Shares of aggregate income from each source differ greatly by income level. Units aged 65 or older are ranked by total money income and divided into five groups of equal size called quintiles. The largest share of income for units in the lowest quintile comes from Social Security benefits (82.6%), and public assistance provides the second largest share (8.4%). For units in the highest income quintile, earnings provide the largest share of income (40.1%). Pensions and Social Security (21.2% and 18.9%) are the next most important, followed by asset income (17.8%).

Shares of aggregate income for the lowest and highest income quintiles, by source, 2004
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Table equivalent for chart. Shares of aggregate income for the lowest and highest income quintiles, by source, 2004
Source of aggregate income Percentage of
aggregate income
for lowest quintile
Percentage of
aggregate income
for highest quintile
Social Security 82.6 18.9
Earnings 1.2 40.1
Pensions 3.5 21.2
Asset income 2.3 17.8
Public assistance 8.4 0.1
Other 2.0 2.0
 
NOTE: The quintile limits for aged units for 2004 are $10,399, $16,363, $25,587, and $44,129.

Over time, Social Security has provided the largest share of aggregate income for units aged 65 or older. In 1962, it provided the largest share, followed closely by earnings. In 2004, 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.

Change in shares of aggregate income, by source, selected years
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Table equivalent for chart. Shares of aggregate income, by source, selected years (in percent)
Year Social Security Pensions Asset income Earnings Other
1962 31 9 16 29 15
1967 34 12 15 29 10
1976 39 16 18 23 4
1978 38 16 19 23 4
1980 39 16 22 19 4
1982 39 15 25 18 3
1984 38 15 28 16 3
1986 38 16 26 17 3
1988 37.9 17.5 24.8 17.0 2.8
1990 36.4 18.3 24.5 17.7 3.1
1992 39.5 19.6 20.6 17.1 3.2
1994 42.1 18.7 17.6 18.0 3.6
1996 40.3 18.5 18.0 20.0 3.2
1998 37.6 18.7 19.9 20.7 3.1
2000 38.4 18.0 17.5 23.1 3.0
2001 38.6 18.1 16.1 24.4 2.8
2002 39.4 19.0 13.6 24.9 3.1
2004 38.6 19.7 12.6 26.3 2.7
 

Poverty Status, Based on Family Income

Highlights
  • High proportions of nonmarried and minority persons aged 65 or older are poor or near poor.
  • The oldest age group (80 or older) has the highest poverty rate.

High proportions of nonmarried and minority persons aged 65 or older 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 13.1% to 23.9%. An additional 9.6% to 11.3% of nonmarried persons and minorities have incomes between the poverty line and 125% of the poverty line (the near poor).

Poverty status, by marital status, sex of nonmarried persons, race, and Hispanic origin, 2004
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Table equivalent for chart. Poverty status, by marital status, sex of nonmarried persons, race, and Hispanic origin, 2004 (in percent)
Sex, marital status, race, or Hispanic origin Poor Near poor
Married persons 4.5 3.6
Nonmarried men 13.1 9.6
Nonmarried women 17.4 10.8
White alone 8.3 6.1
Black alone 23.9 11.2
Hispanic 18.7 11.3
 

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 and near poverty (income between the poverty line and 125% of the poverty line).

Poverty status, by age, 2004
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Table equivalent for chart. Poverty status, by age, 2004 (in percent)
Age Poor Near poor
65–69 9.2 4.6
70–74 9.6 5.7
75–79 9.1 7.4
80 or older 11.3 9.1