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Social Security Averages 40% of Income of Elderly
June 3, 2010
Social Security was the largest source of income for those currently age 65 and
older, accounting for nearly 40 percent of their income on average, in 2008,
according to a study released today by the nonpartisan Employee Benefit Research
Institute (EBRI).
However, the importance of Social Security varied widely, with the lowest
income group very heavily dependent on the federal retirement program compared
with those who have high incomes.
The study, is based on 2008 data from the U.S. Census Bureau's annual March
Current Population Survey.
Here are some of the main points:
Median income
Real median income (midpoint, 50 percent above and 50 percent below) of those
age 65 and older reached $18,001 in 2008, the highest in the Census Bureau time
series. This was an increase from $13,264 (in constant 2009 dollars) in 1974 and
$17,085 in 2004.
Sources of income
Overall, Social Security accounted on average for 39.8 percent of the income
of those 65 and older in 2008. Pension and annuities was 19.7 percent, income
from assets was 13.0 percent, and income from earnings was 25.6 percent.
Distribution of income
Nearly all individuals (89.2 percent) age 65 and older were receiving income
from Social Security, while 55.3 percent received income from assets, 35.4
received income from pensions and annuities, and 20.4 percent received income
from earnings.
The study also showed the wide differences in sources of income by income
level:
Lowest income quintile (less than $8,956 in 2008): Social
Security, 88.4 percent; assets, 4.0 percent; pensions and annuities, 3.4
percent; earnings, 2.0 percent; other, 2.3 percent.
Highest income quintile (more than $38,468 in 2008):
Earnings, 39.3 percent; pensions and annuities, 22.6 percent; Social
Security, 18.6 percent; assets, 17.7 percent; other, 1.8 percent.
In addition, the study showed differences in the composition of income by
gender. For example, Social Security accounted for 48.4 percent of elderly
women's income in 2008, compared with 33.7 percent of elderly men's income. And
pensions and annuities accounted for 21.8 percent of elderly men's income,
compared with 16.8 percent of elderly women's.
The study, in the June EBRI Notes, is available at www.ebri.org. EBRI is a private, nonprofit
research institute based in Washington, DC, that focuses on health, savings,
retirement, and economic security issues. EBRI does not lobby and does not take
policy positions.
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