Income and Poverty Among Older Americans in 2008

Income and Poverty Among Older Americans in 2008

Income and Poverty Among Older Americans
in 2008
Patrick Purcell
Specialist in Income Security
October 2, 2009
Congressional Research Service
7-5700
www.crs.gov
RL32697
CRS Report for Congress
P
repared for Members and Committees of Congress

Income and Poverty Among Older Americans in 2008

Summary
Older Americans are an economically diverse group. In 2008, the median income of individuals
aged 65 and older was $18,208 but incomes varied widely around this average. One-fourth of
Americans 65 and older had incomes of less than $11,139 in 2008, while another one-fourth had
incomes of $33,677 or more. Older Americans receive income from a variety of sources,
including earnings, pensions, personal savings, and public programs such as Social Security and
Supplemental Security Income. This report provides information from the March 2009 Current
Population Survey on the number of elderly individuals and households who received income
from each of these sources in 2008 and the amount of income received by individuals and
households. Income from each source is reported as the annual amount received in 2008.
Social Security and pensions are the two most common sources of income among the aged. In
2008, Social Security paid benefits to 86% of individuals aged 65 and older and to 89% of
households in which the householder or the householder’s spouse was 65 or older. Social Security
is the largest single source of income among the aged. Sixty-nine percent of Social Security
beneficiaries aged 65 or older received more than half of their income from Social Security in
2008. For 41% of elderly recipients and 28% of elderly households, Social Security accounted for
more than 90% of total income in 2008.
Thirty-four percent of persons aged 65 and older received income from private-sector and public
sector pensions in 2008. Among individuals aged 65 and older who reported receiving income
from government pensions, the median amount received in 2008 was $18,000. Among recipients
of private pensions, median pension income was $7,584. Forty-four percent of households in
which either the household head or spouse was aged 65 or older received income from a private
or public pension in 2008. Median household income from public-sector pensions in 2008 was
$19,162. Median household income from private-sector pensions in 2008 was $8,412.
Many Americans prepare for retirement by saving and investing some of their income while they
are working. Of the 37.8 million Americans aged 65 and older who were living in households in
2008, 20.4 million (54%) received income from assets, such as interest, dividends, rent, and
royalties. Most received small amounts of income from the assets they owned. Among individuals
aged 65 and older who received income from assets in 2008, half received less than $1,054. Of
households with a householder or spouse aged 65 or older, 59% received income from assets in
2008. Among these households, median income from assets in 2008 was $1,542.
Earnings are a significant source of income for older Americans, especially for those under age
70. Although there was a trend toward earlier retirement from about 1960 to 1985, in recent years
more Americans have continued to work at older ages. In 2008, 68% of Americans aged 55 to 64
worked at some time during the year. The median earnings of workers aged 55 to 64 were
$37,000. Although just 20% of individuals aged 65 and older worked in 2008, 35% of those aged
65 to 69 had earnings from work. The median earnings of workers aged 65 to 69 were $25,000.
Among all workers 65 and older, median earnings in 2008 were $20,000.
Poverty among Americans aged 65 and older has fallen from one in three older persons in 1960 to
less than one in ten today. In 2008, the poverty rate among individuals aged 65 and older (9.7%)
was lower than the poverty rates among children under age 18 (19%) and adults aged 18 to 64
(11.7%). Although the overall rate of poverty among older Americans is relatively low, it remains
high for women, minorities, the less-educated, and people over age 80.
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Income and Poverty Among Older Americans in 2008

Contents
Introduction ................................................................................................................................ 1
The Data ..................................................................................................................................... 1
Median Individual and Household Income .................................................................................. 2
Sources of Income by Income Quartile........................................................................................ 6
Median Individual and Household Income by Demographic Characteristics .............................. 11
Income from Retirement Benefits.............................................................................................. 13
Social Security.................................................................................................................... 13
Pension Income................................................................................................................... 16
Income from Assets............................................................................................................. 19
Earned Income .................................................................................................................... 22
Poverty ..................................................................................................................................... 24
The Near-Poor .......................................................................................................................... 24
Conclusion................................................................................................................................ 25

Figures
Figure 1. Sources of Individual Income in 2008, Top Quartile, Age 65+ ..................................... 7
Figure 2. Sources of Individual Income in 2008, Second Quartile, Age 65+ ................................ 7
Figure 3. Sources of Individual Income in 2008, Third Quartile, Age 65+................................... 8
Figure 4. Sources of Individual Income in 2008, Bottom Quartile, Age 65+................................ 8
Figure 5. Sources of Household Income in 2008, Top Quartile, Age 65+..................................... 9
Figure 6. Sources of Household Income in 2008, Second Quartile, Age 65+ ............................... 9
Figure 7. Sources of Household Income in 2008, Third Quartile, Age 65+ ................................ 10
Figure 8. Sources of Household Income in 2008, Bottom Quartile, Age 65+ ............................. 10
Figure 9. Median Individual Income by Demographic Traits, 2008............................................ 12
Figure 10. Median Household Income by Demographic Traits of Householder, 2008................. 12
Figure 11. Social Security Income of Individuals Age 65+, 2008 ............................................... 14
Figure 12. Social Security Income of Households Age 65+, 2008 .............................................. 15
Figure 13. Individual Income from Pensions in 2008 ................................................................. 18
Figure 14. Household Income from Pensions in 2008 ................................................................ 18
Figure 15. Percentage of Individuals Aged 65 and Older with Income from Assets in
2008, by Total Individual Income ........................................................................................... 20
Figure 16. Percentage of Households Aged 65 and Older with Income from Assets in
2008, by Total Household Income .......................................................................................... 21
Figure 17. Employment Rates by Age and Sex, March 2009...................................................... 23
Figure 18. Earned Income, by Age, 2008................................................................................... 23
Figure 19. Percentage of Individuals Aged 65 and Older in Poverty, 2008 ................................. 25
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Income and Poverty Among Older Americans in 2008

Tables
Table 1. Percentage of Older Individuals with Income in 2008, Mean and Median
Amounts, by Source................................................................................................................. 4
Table 2. Percentage of Older Households with Income in 2008, Mean and Median
Amounts, by Source................................................................................................................. 5
Table 3. Social Security as a Percentage of Income Among Recipients 65 and Older.................. 14
Table 4. Social Security as a Percentage of Household Income Among Recipient
Households with Head or Spouse Age 65 or Older in 2008 ..................................................... 15
Table 5. Income from Assets, Individuals 65 and Older, 2008 .................................................... 20
Table 6. Household Income from Assets, Householder or Spouse 65 or Older, 2008 .................. 21

Contacts
Author Contact Information ...................................................................................................... 26

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Income and Poverty Among Older Americans in 2008

Introduction
This report describes the sources and amounts of income received by the 37.8 million Americans
aged 65 and older who lived in non-institutional settings in 2008.1 Older persons receive income
from a variety of sources, including earnings, pensions, interest and dividends, and from public
programs such as Social Security and Supplemental Security Income. The substantial variation in
the number of people receiving income from each source and the amounts they receive from each
source are the main topics of this report. The report uses data from the Census Bureau’s March
2009 Current Population Survey to describe the number of elderly individuals and households
receiving income from earnings, pensions, Social Security, interest and dividends, veterans’
benefits, public assistance, and other sources. It also describes how the proportion of total income
received from each source differs between high-income individuals and households and low-
income individuals and households.
In addition to looking at sources and amounts of income, the report examines the income of the
elderly relative to the federal poverty thresholds. The 2008 poverty rate of 9.7% for Americans 65
and older was lower than both the poverty rate for the population 18 to 64 years old (11.7%) and
the poverty rate among children under age 18 (19.0%).2 Nevertheless, in 2008, 3.7 million
Americans aged 65 and older had family incomes below the federal poverty thresholds of
$10,326 for single persons and $13,014 for couples.
Although income is an important measure of a person’s economic well-being, it is not the only
such measure, nor is it always the best one. Individuals with the same cash income may have
significantly different levels of financial assets or other forms of wealth. Some own their homes
while others rent. Some receive non-cash benefits from former employers, such as fully or
partially paid health insurance, while others have to pay for health services or insurance out-of-
pocket. The federal and state governments also provide many non-cash benefits and services such
as Medicaid, Food Stamps, and the Low-Income Home Energy Assistance Program that improve
the financial circumstances of lower-income families, but which do not show up in measures of
cash income. Finally, some older Americans live with family members or receive considerable
non-financial assistance from their families, while others live alone and pay someone to perform
household chores or to provide personal care services. Even with these limitations, however, the
amount of income that older Americans receive is an important measure of their ability to
purchase the goods and services that contribute to their economic well-being.
The Data
The findings in this report are based on data collected in the March 2009 Current Population
Survey (CPS), conducted by the Bureau of the Census. The March 2009 CPS consisted of
interviews with members of approximately 76,200 households, comprising a representative
sample of the civilian, non-institutionalized population of the United States. Each March, the
survey includes detailed questions about sources and amounts of income received during the

1 The data presented here do not include approximately 1.6 million elderly persons who live in nursing homes.
2 U.S. Census Bureau, Income, Poverty, and Health Insurance Coverage in the United States, 2008; P60-236, Table 4,
p. 14, http://www.census.gov/prod/2009pubs/p60-236.pdf. Poverty thresholds differ by age. In 2008, the poverty
threshold for an individual under age 65 was $11,201. The poverty threshold for a couple under age 65 was $14,417.
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Income and Poverty Among Older Americans in 2008

previous calendar year. The CPS is widely used by researchers in government, academia, and the
private sector, and it is the source of the official statistics published annually by the Census
Bureau on median family income, the number of Americans living in poverty, and the number of
people without health insurance. Like any survey, the CPS is subject to error. Sampling error
occurs if the households selected to participate in the survey are not representative of the
population. Non-sampling error occurs if survey participants provide inaccurate information or if
their responses are incorrectly recorded.
Individual Income and Household Income
Income figures in this report are shown both for individual persons and for households. Individuals are classified by
the person’s age. One-person households were counted as elderly households if the householder was 65 or older.
Married-couple households were counted as elderly households if the older of the household head or the household
head’s spouse was 65 or older. This differs from the Census Bureau’s methodology, which classifies households by the
age of the household head. The methodology adopted by CRS has the advantage of including in the count of elderly
households all households in which either the household head or the household head’s spouse was 65 or older. The
estimated number of elderly persons in poverty is based on the Census Bureau’s poverty thresholds, the family’s
income, the age of the householder, and the number of persons in the family.a
a. Family income differs from household income in households in which more than one family resides or in which a family resides
with unrelated individuals.
Median Individual and Household Income
In 2008, 96.6% of individuals aged 65 and older had income from one or more sources. The
median total income of these individuals was $18,208. (See Table 1.) Of all households in which
either the householder or the householder’s spouse (if present) was 65 or older, 99.0% had
income from one or more sources, and the median income of these households was $31,157. (See
Table 2.) In general, because more than one member of a household may have had income from
one or more sources, elderly households were more likely than elderly individuals to have had
income from each source. Households also generally had higher median income from each
source. For example, 35.6% of households in which the householder or householder’s spouse was
65 or older had income from earnings, and the median earnings of those households were
$30,000. In contrast, just 20.1% of individuals aged 65 or older had income from earnings in
2008, and their median earnings were $20,000. Because most individuals aged 65 and older
receive Social Security, the proportion of elderly households that had income from Social
Security in 2008 was only slightly higher than the percentage of elderly individuals with Social
Security income. Eighty-nine percent of households in which the householder or householder’s
spouse was 65 or older had income from Social Security, as did 86% of individuals aged 65 and
older. However, because many households had more than a single recipient, the median Social
Security income of elderly households that received Social Security was 25% greater than the
median Social Security income of individual recipients. Median household Social Security
income in 2008 was $15,557, while median individual Social Security income was $12,437.
Elderly households also were more likely than elderly individuals to have received income from
private pensions, public pensions, and assets. In 2008, 15.8% of households in which the
householder or householder’s spouse was 65 or older received income from public-sector
pensions, compared to 11.7% of individuals aged 65 and older. Elderly households with public-
sector pension income had median pension income of $19,162, compared to $18,000 among
elderly individuals with public pension income. Thirty percent of households in which the
householder or householder’s spouse was 65 or older received income from private-sector
pensions, compared to 23.4% of individuals aged 65 and older. Elderly households with private-
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Income and Poverty Among Older Americans in 2008

sector pension income had median pension income of $8,412, compared to $7,584 among elderly
individuals with private pension income. Fifty-nine percent of elderly households had income
from assets (mainly interest, dividends, and rent) in 2008 compared to 54.0% of individuals aged
65 and older. Among elderly households with asset income, the median amount of asset income
was $1,542, whereas among elderly individuals with asset income, the median amount of asset
income was $1,054.
Relatively few elderly individuals and households received income from veterans’ benefits,
public assistance, or other income sources in 2008. Just 4.0% of elderly households and 2.8% of
elderly individuals received income from veterans’ benefits, which consist mainly of veteran’s
compensation for service-related disabilities and veterans’ pensions for indigent elderly veterans.
Among both elderly households and individuals that received income from veterans’ programs,
the median amount received in 2008 was $7,800. The median amounts were the same in part
because few households had more than one individual who received veterans’ benefits.
In 2008, 4.6% of elderly households and 3.2% of elderly individuals received income from public
assistance, which consists mainly of Supplemental Security Income, Temporary Assistance for
Needy Families, and state general assistance. Among elderly households that received income
from public assistance programs, the median amount received in 2008 was $5,196. Among
elderly individuals with income from public assistance, the median amount received in 2008 was
$4,488.
In 2008, 6.3% of elderly households and 3.4% of elderly individuals received income from other
sources, including unemployment compensation, workers’ compensation, and other unidentified
sources. Among elderly households that received income from these sources, the median amount
received in 2008 was $4,800; among elderly individuals with income from other sources, the
median amount received in 2008 was $4,344.
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Income and Poverty Among Older Americans in 2008

Table 1. Percentage of Older Individuals with Income in 2008, Mean and Median
Amounts, by Source

Age

Total, 55+ 55 to 64 Total, 65+ 65 to 69 70 to 79
80+
Total individuals (in thousands)
72,076
34,289
37,787
11,825
15,908 10,054
Percentage reporting no income
4.9
6.6
3.4
3.4
3.4
3.3
Total income
Percentage with any income
95.1
93.4
96.6
96.6
96.6
96.7
Mean total income ($)
37,431
46,756
29,248
36,145
27,852
23,350
Median total income ($)
23,430
32,000
18,208
22,057
17,573
16,491
Earnings
Percentage with earnings
42.9
68.1
20.1
34.9
18.0
6.2
Mean earnings ($)
47,589
51,206
36,499
41,586
30,840
28,879
Median earnings ($)
33,000
37,000
20,000
25,000
15,000
14,000
Social Security
Percentage with Social Security
52.7
16.3
85.8
78.2
88.5
90.4
Mean Social Security ($)
12,699
11,770
12,859
13,010
12,786
12,818
Median Social Security ($)
12,101
10,937
12,437
12,480
12,113
12,557
Public pensions
Percentage with public pensions
9.3
6.7
11.7
11.0
11.8
12.5
Mean public pension ($)
24,052
26,468
22,807
25,580
22,703
20,087
Median public pension ($)
19,200
21,700
18,000
21,600
17,630
15,432
Private pensions or annuities

Percentage with private pensions
16.0
7.8
23.4
21.4
23.9
24.9
Mean private pension ($)
13,326
17,386
12,096
14,051
11,795
10,580
Median private pension ($)
8,400
12,000
7,584
9,600
7,200
6,636
Income from assets
Percentage with asset income
54.4
54.9
54.0
55.2
54.2
52.3
Mean asset income ($)
5,767
4,760
6,697
6,691
6,978
6,243
Median asset income ($)
750
500
1,054
1,015
1,069
1,150
Veterans’ benefits
Percentage with veterans’ benefits
2.6
2.3
2.8
2.2
2.8
3.7
Mean veterans’ benefit ($)
12,116
14,531
10,310
10,501
10,231
10,271
Median veterans’ benefit ($)
8,652
10,800
7,800
6,840
8,568
7,896
Public assistancea
Percentage with public assistance
3.4
3.6
3.2
2.7
3.4
3.3
Mean public assistance ($)
6,429
7,615
5,188
5,325
5,242
4,967
Median public assistance ($)
6,533
7,644
4,488
4,800
4,106
4,560
Other incomeb
Percentage with other income
4.9
6.5
3.4
3.9
3.1
3.1
Mean other income ($)
8,673
8,505
8,965
9,441
9,040
8,143
Median other income ($)
4,356
4,356
4,344
4,080
4,800
4,224
Source: Congressional Research Service (CRS) analysis of the March 2009 Current Population Survey.
a. Includes Supplemental Security Income, Temporary Assistance for Needy Families, and state general
assistance.
b. Includes unemployment compensation, workers’ compensation, and income from unidentified sources.
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Income and Poverty Among Older Americans in 2008

Table 2. Percentage of Older Households with Income in 2008, Mean and Median
Amounts, by Source

Age

Total, 55+ 55 to 64 Total, 65+ 65 to 69 70 to 79
80+
Total households (in thousands)
47,121
20,829
26,292
7,648
11,055
7,589
Percentage reporting no income
1.1
1.3
1.0
0.8
1.1
1.0
Total income
Percentage with any income
98.9
98.7
99.0
99.2
98.9
99.0
Mean total income ($)
62,736
81,286
48,083
63,457
46,699 34,571
Median total income ($)
41,441
60,481
31,157
44,039
30,966 23,657
Earnings
Percentage with earnings
56.6
83.2
35.6
57.1
34.3
16.0
Mean earnings ($)
68,133
79,152
47,760
57,309
40,289 36,680
Median earnings ($)
48,000
60,000
30,000
38,000
24,000 23,000
Social Security
Percentage with Social Security
59.2
21.6
89.0
80.9
91.6
93.4
Mean Social Security ($)
16,956
14,121
17,502
17,314
18,256 16,589
Median Social Security ($)
15,233
12,984
15,557
15,804
16,229 14,400
Public pensions
Percentage with public pensions
13.1
9.6
15.8
14.9
16.4
15.9
Mean public pension ($)
26,114
28,746
24,848
28,513
24,749 21,541
Median public pension ($)
20,400
24,000
19,162
24,000
18,000 16,188
Private pensions or annuities

Percentage with private pensions
21.9
11.4
30.2
28.3
31.4
30.3
Mean private pension ($)
14,801
18,729
13,629
15,754
13,613 11,657
Median private pension ($)
9,600
13,000
8,412
10,800
8,616
7,200
Income from assets
Percentage with asset income
59.4
60.1
58.8
60.4
58.6
57.5
Mean asset income ($)
8,413
6,949
9,599
10,020
10,217
8,236
Median asset income ($)
1,110
736
1,542
1,500
1,600
1,500
Veterans’ benefits
Percentage with veterans’ benefits
3.9
3.6
4.0
3.3
4.1
4.7
Mean veterans’ benefit ($)
12,405
14,805
10,686
10,406
10,755 10,800
Median veterans’ benefit ($)
8,568
10,800
7,800
6,936
8,652
7,896
Public assistancea
Percentage with public assistance
5.4
6.4
4.6
4.4
5.2
3.9
Mean public assistance ($)
7,031
7,760
6,236
6,172
6,372
6,048
Median public assistance ($)
6,876
7,608
5,196
5,304
5,400
4,977
Other incomeb
Percentage with other income
8.8
12.0
6.3
8.2
6.0
4.8
Mean other income ($)
8,782
8,673
8,948
9,099
8,965
8,657
Median other income ($)
4,800
4,800
4,800
4,800
4,503
5,200
Source: Congressional Research Service (CRS) analysis of the March 2009 Current Population Survey.
Note: Households are grouped according to the age of the older of the householder or householder’s spouse.
a. Includes Supplemental Security Income, Temporary Assistance for Needy Families, and general assistance.
b. Includes unemployment compensation, workers’ compensation, and income from unidentified sources.
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Sources of Income by Income Quartile
Figures 1 through 4 show the percentage of total income that was received from each source of
income by individuals aged 65 and older who had any income in 2008. For example, Figure 1
shows that among individuals with total income in the highest 25% among all persons aged 65
and older—those with 2008 income of more than $33,677—38% of total income came from
earnings, 23% of income came from pensions, 17% of income came from assets, 20% of income
came from Social Security, less than 1% of income came from public assistance, and 2% came
from other sources. Thus, among elderly individuals in the highest income quartile, 78% of total
income came from earnings, pensions, and assets.
In contrast, among elderly individuals whose income in 2008 was in the lowest income quartile
for people aged 65 and older—those with income of less than $11,139—2.1% of all income came
from earnings, 3.1% of income came from pensions, 3.7% of income came from assets, 84% of
income came from Social Security, 6.5% came from public assistance, and less than 1% came
from other sources. (See Figure 4.) Among individuals in the lowest income quartile, just 9% of
total income came from earnings, pensions, and assets. Figure 2 and Figure 3 show that Social
Security comprised 55% and 84%, respectively, of income received by individuals aged 65 and
older in the second- and third-highest income quartiles in 2008.
Figures 5 through 8 show the percentage of total income received from each source by all elderly
households that had any income in 2008. For example, Figure 5 shows that among elderly
households with total income in the highest 25% among households in which either the
householder or householder’s spouse was 65 or older—those with 2008 income of more than
$59,442—49% of all income came from earnings, 16% of income came from pensions, 16% of
income came from assets, 17% of income came from Social Security, less than 1% of income
came from public assistance, and 2% came from other sources. Thus, among elderly households
in the highest income quartile, 81% of total income came from earnings, pensions, and assets.
In contrast, among elderly households whose income in 2008 was in the lowest quartile for
households in which either the householder or spouse was 65 or older—those with income of less
than $17,194—3% of all income came from earnings, 5% of income came from pensions, 3% of
income came from assets, 84% of income came from Social Security, 4% came from public
assistance, and 1% came from other sources. (See Figure 8.) Among households in the lowest
income quartile, 11% of total income came from earnings, pensions, and assets. Figure 6 and
Figure 7 show that Social Security comprised 42% and 67%, respectively, of income received by
elderly households in the second and third income quartiles in 2008.
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Income and Poverty Among Older Americans in 2008

Figure 1. Sources of Individual Income in 2008, Top Quartile, Age 65+
2008 Individual Income of More than $33,677
Other Income
2.3%
Public Assistance
0.0%
Social Security
Asset Income
19.9%
16.8%
Pensions
22.9%
Earnings
38.1%

Figure 2. Sources of Individual Income in 2008, Second Quartile, Age 65+
2008 Individual Income of $18,208 to $33,677
Other Income
2.6%
Public Assistance
0.3%
Asset Income
9.0%
Pensions
22.0%
Social Security
54.6%
Earnings
11.7%

Source: Both figures from CRS analysis of the March 2009 Current Population Survey.
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Income and Poverty Among Older Americans in 2008

Figure 3. Sources of Individual Income in 2008, Third Quartile, Age 65+
2008 Individual Income of Less than $11,139
Public Assistance
Other Income
6.5%
0.7%
Asset Income
3.7%
Pensions
3.1%
Earnings
2.1%
Social Security
84.0%

Figure 4. Sources of Individual Income in 2008, Bottom Quartile, Age 65+
2008 Individual Income of Less than $11,139
Public Assistance
Other Income
6.5%
0.7%
Asset Income
3.7%
Pensions
3.1%
Earnings
2.1%
Social Security
84.0%

Source: Both figures from CRS analysis of the March 2009 Current Population Survey.
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Figure 5. Sources of Household Income in 2008, Top Quartile, Age 65+
2008 Household Income of More than $59,442
Other Income
2%
Public Assistance
0%
Social Security
Asset Income
17%
16%
Pensions
16%
Earnings
49%

Figure 6. Sources of Household Income in 2008, Second Quartile, Age 65+
2008 Household Income of $31,157 to $59,442
Other Income
3%
Public Assistance
1%
Asset Income
8%
Social Security
42%
Pensions
23%
Earnings
23%

Source: Both figures from CRS analysis of the March 2009 Current Population Survey.
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Income and Poverty Among Older Americans in 2008

Figure 7. Sources of Household Income in 2008, Third Quartile, Age 65+
2008 Household Income of $17,194 to $31,157
Other Income
Public Assistance
2%
1%
Asset Income
6%
Pensions
14%
Earnings
10%
Social Security
67%

Figure 8. Sources of Household Income in 2008, Bottom Quartile, Age 65+
2008 Household Income of Less than $17,194
Public Assistance
Other Income
4%
1%
Asset Income
3%
Pensions
5%
Earnings
3%
Social Security
84%

Source: Both figures from CRS analysis of the March 2009 Current Population Survey.
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Income and Poverty Among Older Americans in 2008

Median Individual and Household Income by
Demographic Characteristics
Income received by the elderly varies significantly by age, sex, race, education and marital status.
Figure 9 shows that in 2008, individuals between the ages of 65 and 69 had a median income of
$22,057 while those who were 80 or older had a median income of $16,491. Men 65 and older
had a median income of $25,344, while women 65 and older had a median income of just
$14,429. The median income of older African Americans, $14,357, was 26% lower than the
median income of older white Americans—$19,372. The median income of older Americans
increases substantially with their educational level. Those with only a high-school diploma had a
median income of $16,733 in 2008, whereas college graduates had a median income of $34,031.
The median income of married individuals aged 65 and older—$19,250—was $1,893 higher than
the median income of single individuals aged 65 and older.
Figure 10 shows the median income of households in which the householder or the householder’s
spouse was aged 65 or older.3 In 2008, the median income of households in which the household
head was 65 to 69 years old was $44,857. Households in which the household head was 80 or
older had a median income of $22,684. Elderly households with a male household head had a
median income of $40,185, while households with a female household head had a median income
of $25,157. The median income of elderly households in which the householder was African
American was $23,958, 26% lower than the median income of elderly households with a white
householder ($32,514). Elderly households in which the householder had only a high-school
diploma had a median income of $27,684 in 2008, while elderly households headed by a college
graduate had a median income of $57,957. The median income of married-couple households
with a householder or spouse aged 65 or older was $48,099 in 2008, more than twice the median
income of elderly households in which the householder was not married ($20,572).

3 In Figure 10, the demographic traits are those of the individual who was designated as the householder on the CPS.
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Income and Poverty Among Older Americans in 2008

Figure 9. Median Individual Income by Demographic Traits, 2008
l
s
Not Married
$17,357
ita
tu
a
Mar
St
Married
$19,250
College Graduate
$34,031
n
io
Some College
$21,082
at
c
u
d
High School Grad
$16,733
E
Less than 12 years
$12,420
Hispanic
$11,957
ce
a
Black
$14,357
R
White
$19,372
Women
$14,429
ex
S
Men
$25,344
80+
$16,491
e
g
70-79
$17,573
A
65-69
$22,057
l
e
All
$18,208
Al
Ag
65+
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000

Figure 10. Median Household Income by Demographic Traits of Householder, 2008
l
s
Not Married
$20,572
ta
ri
tu
a
Ma
St
Married
$48,099
College Graduate
$57,957
n
Some College
$36,169
tio
a
c
u
High School Grad
$27,684
Ed
Less than 12 years
$19,287
Hispanic
$25,000
e
c
a
Black
$23,958
R
White
$32,514
Women
$25,157
x
Se
Men
$40,185
80+
$22,684
e
g
70-79
$29,713
A
65-69
$44,857
l
e
+
5
All
$31,157
Al
Ag
6
$-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000

Source: Both figures from CRS analysis of the March 2009 Current Population Survey.
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Income and Poverty Among Older Americans in 2008

Income from Retirement Benefits
Social Security
Retirement benefits from Social Security are the most common source of income among
Americans aged 65 and older. In 2008, Social Security paid benefits to 86% of individuals aged
65 and older and to 89% of households in which the householder or householder’s spouse was 65
or older. Social Security is the largest single source of income among the aged. In 2008, 68.9% of
Social Security beneficiaries aged 65 or older received more than half of their income from Social
Security, and 57.1% of elderly households that received Social Security benefits received more
than half of their total household income from Social Security. (See Table 3 and Table 4.)
For 40.6% of elderly individual recipients, Social Security accounted for more than 90% of their
income in 2008. Among elderly households receiving Social Security, 27.7% received 90% or
more of their total household income from Social Security. Although Social Security is an
important source of income for a majority of the elderly, the benefit amounts paid by Social
Security are relatively small when compared to many recipients’ pre-retirement incomes.
According to the Social Security Administration, Social Security retired worker benefits replace
approximately 55% of the earnings of a career-long low-wage earner, 41% of the earnings of a
career-long average-wage earner, and 27% of the earnings of a career-long high-wage earner.
Average monthly Social Security benefits in December 2008 were $1,153 for a retired worker and
$1,877 for an elderly couple. As Figure 11 shows, 34% of all individual beneficiaries received
less than $10,000 from Social Security in 2008, and just 9% received more than $20,000 in Social
Security benefits. Because many elderly households have more than one beneficiary, the median
Social Security benefit received by households with Social Security income is higher than the
median amount received by individual recipients. In 2008, only 18% of elderly beneficiary
households received less than $10,000 from Social Security, while 32% of households received
Social Security benefits totaling more than $20,000. (See Figure 12.)
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Income and Poverty Among Older Americans in 2008

Table 3. Social Security as a Percentage of Income Among Recipients 65 and Older
Percent of Income
Recipients
Percent of
from Social Security
(thousands)
Recipients
Less than 10%
945
2.9
10% to 19%
1,815
5.6
20% to 29%
2,276
7.0
30% to 39%
2,421
7.4
40% to 49%
2,651
8.2
50% to 59%
2,391
7.4
60% to 69%
2,362
7.3
70% to 79%
2,143
6.6
80% to 89%
2,258
7.0
90% to 99%
4,731
14.6
100% of income
8,413
26.0
Source: CRS analysis of the March 2009 Current Population Survey.
Note: In 2008, 5.4 million people aged 65 and older had no Social Security income.

Figure 11. Social Security Income of Individuals Age 65+, 2008
40.0%
34.4%
35.0%
30.0%
26.9%
25.0%
22.6%
20.0%
15.0%
9.3%
10.0%
6.9%
5.0%
0.0%
Less than $5,000
$5,000 to $9,999
$10,000 to $14,999
$15,000 to $19,999
$20,000+

Source: CRS analysis of the March 2009 Current Population Survey.
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Income and Poverty Among Older Americans in 2008

Table 4. Social Security as a Percentage of Household Income Among Recipient
Households with Head or Spouse Age 65 or Older in 2008
Percent of Income from
Households
Percent of
Social Security
(thousands)
Households
Less than 10%
1,054
4.5
10% to 19%
2,179
9.3
20% to 29%
2,474
10.6
30% to 39%
2,160
9.2
40% to 49%
2,181
9.3
50% to 59%
1,900
8.1
60% to 69%
1,796
7.7
70% to 79%
1,651
7.1
80% to 89%
1,513
6.5
90% to 99%
2,527
10.8
100% of income
3,962
16.9
Source: CRS analysis of the March 2009 Current Population Survey.
Note: In 2008, 2.9 million households with a household head or spouse aged 65 or older had no Social Security
income.

Figure 12. Social Security Income of Households Age 65+, 2008
35.0%
32.3%
30.0%
27.9%
25.0%
21.4%
20.0%
14.2%
15.0%
10.0%
4.1%
5.0%
0.0%
Less than $5,000
$5,000 to $9,999
$10,000 to $14,999
$15,000 to $19,999
$20,000+

Source: CRS analysis of the March 2009 Current Population Survey.
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Income and Poverty Among Older Americans in 2008

Pension Income
Since the late 1970s, the proportion of American workers who participate in employer-sponsored
retirement plans has remained fairly stable at about half of the workforce. The Department of
Labor’s National Compensation Survey reports that in March 2009, 51% of all private-sector
workers participated in an employer-sponsored retirement plan of some kind. However, a point-
in-time snapshot of pension participation is a poor indicator of who will receive pension income
in retirement. Some workers not covered by a pension plan today may have earned a pension at a
previous job, or they may earn a pension benefit in the future. Others who are currently
participating in a pension plan may never fully vest in their pension benefits, or they might take
their accrued benefit as a lump sum before retirement and spend all or part of the distribution.
To receive pension income in retirement, an individual must remain a participant in the plan long
enough to earn a pension benefit and must not spend the accrued benefit before retirement. In
1986, Congress shortened the maximum vesting period (the length of time it takes to earn a
pension benefit) from 10 years to 5 years, thus making it easier for employees whose employer
sponsors a pension to earn a benefit under the plan.4 On the other hand, many employers offer
separating employees the opportunity to take their accrued retirement benefit as a lump-sum
distribution. Most defined contribution plans, such as those authorized under §401(k) of the
Internal Revenue Code, and some defined benefit plans permit departing employees to take a
lump-sum distribution. Many employees roll these distributions into another employer-sponsored
retirement plan or into an individual retirement account, but some spend all or part of the
distribution, thus reducing their future retirement income.5
In 2008, 12.9 million people aged 65 and older—34.2% of that age group—received income from
a private or public pension.6 Of these people, 4.4 million had income from a public-sector
pension—that is, from previous employment in the federal, state, or local government—and 8.8
million received income from private-sector pension plans.7 Together, the federal, state, and local
governments account for only about one-seventh of all jobs in the United States. In 2008, for
example, just 14.2% of all workers in the United States were employed by the federal, state, and
local governments. Nevertheless, more than one-third of pension recipients aged 65 and older
received income from government-sponsored pension plans in 2008.
The disparity between the percentage of jobs that are in the government sector and the percentage
of retirees with government pensions is accounted for mainly by two factors, both of which make
it more likely that a government employee will earn a pension benefit than will a worker in the
private sector. First, more government jobs than private-sector jobs offer pension benefits to their
employees. According to the Department of Labor, in March 2009, 90% of state and local

4 Tax Reform Act of 1986, P.L. 99-514. The Pension Protection Act of 2006 (P.L. 109-280) further reduced the
maximum vesting period in many plans to three years.
5 See CRS Report RL30496, Pension Issues: Lump-Sum Distributions and Retirement Income Security, by Patrick
Purcell.
6 As reported here, “pension income” includes payments from a company or union pension, payments from a federal,
state, or local government pension, military retirement pay, regular payments from an annuity or paid-up insurance
policy, and regular payments from an IRA, Keogh account, or a §401(k)-type account. As defined on the CPS, pension
income does not include lump-sum distributions from pension plans. To the extent that individuals receive lump-sum
distributions from plans and later draw on those amounts to supplement their income, the CPS understates individual
and household income from pension plans.
7 These numbers sum to 13.2 million. About 300,000 people had both types of pension.
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Income and Poverty Among Older Americans in 2008

government employees worked at jobs that offered retirement benefits, compared to 67% of
employees in the private sector. Eighty-six percent of state and local government employees
participated in an employer-sponsored retirement plan, compared to 51% of private-sector
employees.8 Second, government employees tend to stay in their jobs longer than private-sector
workers, making it more likely that the government employee will fully vest in the pension
benefits he or she has earned. The Department of Labor reports that in January 2008, the median
tenure of government workers with their current employer was double the median tenure of
workers in the private sector. Public-sector employees had a median tenure of 7.2 years, while
private-sector workers had a median tenure of 3.6 years.9
Public-sector employees not only are more likely to receive a pension in retirement than are
workers in the private-sector; they also receive larger pensions than those who worked in the
private sector. Among the 4.4 million people aged 65 and older who reported income from a
government pension in 2008, the median annual amount was $18,000. Twenty-seven percent of
people receiving a public-sector pension had pension income of less than $10,000 in 2008, while
26% reported pension income of more than $30,000. (See Figure 13.) Among the 8.8 million
people aged 65 and older who reported income from a private-sector pension in 2008, the median
annual amount was $7,584. Fifty-nine percent of private pension recipients reported that their
pension income was less than $10,000 in 2008 and 9% reported pension income of more than
$30,000.
Among the 4.2 million elderly households that reported income from a government pension in
2008, the median annual amount was $19,162. Twenty-six percent of households receiving a
public-sector pension reported that their pension income was less than $10,000 in 2008 and 29%
reported pension income of more than $30,000. (See Figure 14.) Among the 7.9 million elderly
households that reported income from a private-sector pension in 2008, the median annual
amount was $8,412. Fifty-five percent of households with private pension income reported that
their pension income was less than $10,000 in 2008 and 11.5% reported pension income of more
than $30,000.
Two Types of Pension Plans
Over the past 25 years, there has been a shift away from defined benefit pension plans to defined contribution plans,
such as the 401(k) plan. A defined benefit or “DB” plan usual y pays a lifelong annuity based on the employee’s length
of service and average salary. Most DB plans are funded entirely by employer contributions and investment earnings.
Defined contribution or “DC” plans are much like savings accounts maintained by employers on behalf of each
participating employee. The employer contributes a dollar amount or percentage of pay, which is invested in stocks,
bonds, or other assets. The employee usual y contributes to the plan, too. In a DC plan, it is the employee who bears
the investment risk. At retirement, the balance in the account is the sum of al contributions plus interest, dividends,
and capital gains—or losses. The account balance is typically distributed as a lump sum or in installments. Many large
employers recently have converted their traditional DB pensions to hybrid plans that have characteristics of both DB
and DC plans, the most popular of which has been the cash balance plan. In a cash balance plan, the benefit is defined
in terms of an account balance. The employer makes contributions to the plan and pays interest on the accumulated
balance. However, these account balances are merely bookkeeping devices. They are not individual accounts owned
by the participants. Legal y, therefore, a cash balance plan is a defined benefit plan.

8 U.S. Department of Labor, Bureau of Labor Statistics, news release USDL 09-872, Employee Benefits in the United
States, March 2009, July 28, 2009, http://www.bls.gov/news.release/pdf/ebs2.pdf.
9 U.S. Department of Labor, Bureau of Labor Statistics, news release USDL 08-1344, Employee Tenure in 2008,
September 26, 2008, http://www.bls.gov/news.release/tenure.nr0.htm.
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Income and Poverty Among Older Americans in 2008

Figure 13. Individual Income from Pensions in 2008
40.0%
36.4%
35.0%
30.0%
ts
26.4%
n
e 25.0%
ipi
23.0%
c
e
R
18.8%
20.0%
of
ge
15.8%
ta
n
13.2%
14.2%
14.8%
e 15.0%
rc
e
11.5%
P
8.8%
8.9%
10.0%
8.0%
5.0%
0.0%
Less than $5,000 $5,000 to $9,999
$10,000 to
$15,000 to
$20,000 to
$30,000+
$14,999
$19,999
$29,999
Individual Income from Pensions in 2008
Private Pensions
Public Pensions

Figure 14. Household Income from Pensions in 2008
35.0%
32.8%
29.0%
30.0%
lds
o
h 25.0%
e
22.2%
ous
t H
18.9%
n 20.0%
e
ipi
c
e
15.4% 15.1%
R 15.0%
13.3%
of
12.3%
ge
11.5%
11.3%
ta
n
9.6%
e 10.0%
8.5%
rc
e
P
5.0%
0.0%
Less than
$5,000 to
$10,000 to
$15,000 to
$20,000 to
$30,000+
$5,000
$9,999
$14,999
$19,999
$29,999
Household Income from Pensions in 2008
Private Pensions
Public Pensions

Source: CRS analysis of the March 2009 Current Population Survey.
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Income and Poverty Among Older Americans in 2008

Income from Assets
Many Americans prepare for retirement by saving and investing some of their income while they
are working. Of the 37.8 million Americans aged 65 and older who were living in households in
2008, 20.4 million (54%) received income from assets, such as interest, dividends, rent, and
royalties. Most received small amounts of such income. Half of those who had income from
assets in 2008 received less than $1,054. The data displayed in Figure 15 show that low-income
individuals were less likely to have received income from assets. Among individuals aged 65 and
older whose total income in 2008 was less than $10,000, 36% had asset income. In contrast, of
those whose total income was more than $50,000, 81% had asset income.
Median income from assets also differed between the lower-income and higher-income elderly.
Among people aged 65 and older with total annual income under $10,000 in 2008 who received
asset income, the median amount of this income was only $225. Among individuals with total
annual incomes of more than $50,000 who received income from assets, their median asset
income in 2008 was $7,313. (See Table 5.)
Of the 26.3 million households in which either the householder or the householder’s spouse was
aged 65 or older in 2008, 15.5 million (59%) received income from assets. Most households
received relatively small amounts of income from assets. Half of the elderly households that had
income from assets in 2008 received less than $1,542. The data displayed in Figure 16 show that
low-income households were less likely to have received income from assets. Among elderly
households that had total income in 2008 of less than $10,000, 27% had asset income. On the
other hand, of the households with total income of more than $50,000, 78% had asset income.
Among households in which the householder or spouse was 65 or older that had total annual
incomes under $10,000 in 2008, 27% received income from assets, and the median amount of
asset income they received was $199. Among elderly households with total annual incomes of
more than $50,000, 78% received asset income, and their median asset income in 2008 was
$5,508. (See Table 6.)10

10 Median asset income among households with total income of more than $50,000 is lower than median asset income
among individuals with total income of more than $50,000 because this amount of annual income is less common
among elderly individuals than among elderly households. In 2008, only 14% of individuals had total annual income of
more than $50,000. In the same year, 31% of households with a household head or spouse age 65 or older had total
annual income of $50,000 or more.
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Income and Poverty Among Older Americans in 2008

Figure 15. Percentage of Individuals Aged 65 and Older with Income from Assets in
2008, by Total Individual Income
100%
90%
80%
70%
ls
a
idu
v
60%
di
In
50%
of
e
g
ta
n
40%
e
rc
e
P
30%
20%
10%
0%
Less than $10,000
$10,000 to $19,999 $20,000 to $29,999 $30,000 to $49,999
$50,000 or more
Total Individual Income
Without Asset Income
With Asset Income

Source: CRS analysis of the March 2009 Current Population Survey.

Table 5. Income from Assets, Individuals 65 and Older, 2008
Number of
Percent
Median
People
with Asset
Mean Asset
Asset
Total Income, 2008
(thousands)
Income
Income
Income
Less than $10,000
7,405
36.2
$695
$225
$10,000 to $19,999
12,351
45.9
1,612
500
$20,000 to $29,999
6,137
63.4
3,311
1,111
$30,000 to $39,000
3,391
72.0
4,987
1,750
$40,000 to $49,999
1,954
73.6
7,271
2,500
$50,000 or more
5,268
81.2
21,068
7,313
All persons with any

incomea
36,506
55.9
$6,697
$1,054
a. Of 37.787 million individuals aged 65 and older in 2008, 36.506 million (96.6%) reported income from one
or more sources and 20.397 million (54.0%) reported income from assets. Of the 36.506 million individuals
who reported income from any source, 55.9% reported having received asset income.
Source: CRS analysis of the March 2009 Current Population Survey.
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Income and Poverty Among Older Americans in 2008

Figure 16. Percentage of Households Aged 65 and Older with Income from Assets in
2008, by Total Household Income
100%
90%
80%
70%
ds
ol
h
e
s
60%
u
o
f H
50%
o
ge
ta
40%
n
e
rc
e
P
30%
20%
10%
0%
Less Than $10,00
$10,000 to $19,999 $20,000 to $29,999 $30,000 to $49,999
$50,000 or more
Total Household Income in 2008
Without Asset Income
With Asset Income

Source: CRS analysis of the March 2009 Current Population Survey.

Table 6. Household Income from Assets, Householder or Spouse 65 or Older, 2008
Number of
Percent
Median
Households
with Asset
Mean Asset
Asset
Total Income, 2008
(thousands)
Income
Income
Income
Less than $10,000
2,020
26.8%
$780
$199
$10,000 to $19,999
5,968
40.3
1,216
266
$20,000 to $29,999
4,571
56.1
2,654
1,000
$30,000 to $39,000
3,247
66.7
3,768
1,200
$40,000 to $49,999
2,153
68.1
4,774
7,753
$50,000 or more
8,074
78.4
19,463
5,508
All households with

any incomea
26,032
59.4
$9,599
$1,542
Source: CRS analysis of the March 2009 Current Population Survey.
a. Of 26.292 million households with a householder or spouse aged 65 and older in 2008, 26.032 million
(99.0%) had income from any source and 15.464 million (58.8%) had income from assets. Of the 26.032
million households with income from any source, 59.4% reported having received asset income.
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Income and Poverty Among Older Americans in 2008

Earned Income
While many people continue to work into their 60s and beyond, labor force participation rates
begin to drop after about age 55. Although there was a trend toward earlier retirement from about
1960 to 1985, the trend for the past 25 years has been that more Americans have continued to
work at older ages.11 In March 2009, 69% of men and 62% of women between the ages of 55 and
61 were working either full-time or part-time. Of those between the ages of 62 and 64, 52% of
men and 41% of women were employed. Among 65 to 69-year olds, 33% of men and 25% of
women were employed. Although the proportion of older Americans who work declines sharply
after age 65, Figure 17 shows that 14% of men and 8% of women who were 70 or older in March
2009 were still working.
Not only are people progressively less likely to work as they pass age 60, the average annual
earnings of those who continue to work also begin to decline at about the same age. This can be
attributed both to working fewer hours and to workers moving from higher-paying “career jobs”
to lower wage “bridge jobs” before they exit the workforce permanently.12 In 2008, the median
earnings of workers aged 55 to 61 were $38,000, while the median earnings of workers aged 62
to 64 were $33,000. For those aged 65 or older who were working, median earnings were $20,000
in 2008. Figure 18 shows the decline in workers’ annual earnings as they age. At the top of the
earnings scale, 38% of workers aged 55 to 61 earned $50,000 or more in 2008, while only 23% of
those aged 65 and older had earned income totaling more than $50,000 in that year. In contrast,
while only 10% of Americans aged 55 to 61 who worked in 2008 had total earnings of less than
$10,000, 30% of workers aged 65 and older had earnings of $10,000 or less in 2008.

11 Joseph Quinn, “Retirement Trends and Patterns Among Older American Workers” in Stuart Altman and David
Shactman (eds.), Policies for an Aging Society (Baltimore: Johns Hopkins University Press, 2002), pp. 293-315.
12 For more information on the labor force participation of older workers, see CRS Report RL30629, Older Workers:
Employment and Retirement Trends, by Patrick Purcell.
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Income and Poverty Among Older Americans in 2008

Figure 17. Employment Rates by Age and Sex, March 2009
80.0%
69.4%
70.0%
62.0%
60.0%
52.0%
d
e 50.0%
oy
pl
m
41.0%
E 40.0%
ge
ta
33.3%
n
e
rc 30.0%
e
P
24.5%
20.0%
14.0%
7.9%
10.0%
0.0%
55 to 61
62 to 64
65 to 69
70+
Age
Men
Women

Figure 18. Earned Income, by Age, 2008
100%
90%
80%
70%
rs
e
rk
60%
o
W
of
50%
e
g
ta
n
e
40%
rc
e
P
30%
20%
10%
0%
55 to 61
62 to 64
65+
Age of Worker
Less than $10,000
$10,000 to $29,999
$30,000 to $49,999
$50,000 or more

Source: Both figures from CRS analysis of the March 2009 Current Population Survey.
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Income and Poverty Among Older Americans in 2008

Poverty
Poverty among the elderly has decreased dramatically over the past five decades. In 1959, the
poverty rate among Americans aged 65 and older was 35%. Largely due to increases in Social
Security benefits, the elderly poverty rate fell to about 15% by 1975. The percentage of older
Americans in poverty has stayed steady at roughly 10% since the mid-1990s. Although a smaller
percentage of the elderly are in poverty than are people under 65, more than 3.6 million
Americans aged 65 and older had family incomes below the federal poverty threshold in 2008.13
Although the poverty rate for all persons aged 65 and older was just 9.7% in 2008, the poverty
rates among women, minorities, single individuals, those with low education, and the oldest old
were higher. (See Figure 19.) Twelve percent of women aged 65 and older were in poverty in
2008 compared with only 6.7% of men. Because women live longer, the number of poor older
women in 2008 (2.5 million) was more than twice the number of poor older men (1.1 million).
Poverty rates are especially high among minorities. In 2008, one-fifth of elderly African-
Americans and elderly Hispanics were in poverty. About 80% of all older Americans identify
their ethnicity as white, non-Hispanic. Thus, although only 7.6% of older white Americans were
poor, poor white persons comprised 60% of all poor elderly persons in the United States in 2008.
Older individuals with low education also had high poverty rates. Nineteen percent of those
without a high school education had family incomes below the poverty line in 2008 compared
with only 4.4% of those with a college degree. There is a significant difference in the poverty
rates of married persons and single elderly individuals. Married persons, who often have more
than one source of income, had a poverty rate of only 4.9% in 2008. In contrast, 15.5% of
unmarried individuals aged 65 and older had incomes below the poverty threshold in 2008. The
oldest Americans had the highest poverty rates. Among individuals 80 and older, 11.5% were
poor in 2008, compared with 7.5% of those between the ages of 65 and 69.
The Near-Poor
Many older Americans have family incomes that put them just above the official poverty
threshold. In 2008, only 9.7% of people aged 65 and older had incomes below the poverty
thresholds of $10,326 for an individual and $13,014 for a couple; however, another 13.1% of
Americans aged 65 and older had family incomes between 100% and 149% of the poverty
threshold. Also, whereas 11.5% of persons aged 80 and older had incomes below the poverty
threshold, another 17.9% of people aged 80 and older had family incomes between 100% and
149% of the poverty threshold in 2008.

13 The official poverty threshold in 2008 for a single person aged 65 or older was $10,326. The poverty threshold for a
couple in which at least one member was 65 or older was $13,014. See Poverty Thresholds 2008, available at
http://www.census.gov/hhes/www/poverty/threshld/thresh08.html.
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Income and Poverty Among Older Americans in 2008

Figure 19. Percentage of Individuals Aged 65 and Older in Poverty, 2008
l
s
Not Married
15.5%
ta
ri
tu
a
Ma
St
Married
4.9%
College Graduate
4.4%
n
Some College
7.7%
tio
a
c
u
High School Grad
8.2%
d
E
Less than 12 years
19.3%
Hispanic
19.3%
e
c
a
Black
19.9%
R
White
7.6%
Women
11.9%
ex
S
Men
6.7%
80 and up
11.5%
e
g
70 to 79
10.2%
A
65 to 69
7.5%
l
e
All
9.7%
Al
Ag
65+
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%

Source: CRS analysis of the March 2009 Current Population Survey.
Conclusion
Americans aged 65 and older receive income from a variety of sources. Although Social Security,
pensions, and income from assets are the most common income sources, earnings also are
important, especially for those under age 70. Income from assets in the form of interest and
dividends makes up a significant percentage of the aggregate income of the elderly population.
However, most elderly individuals receive only modest amounts of interest and dividend income,
whereas a relatively small number of people receive large amounts of income from these sources.
Social Security is both the largest source of aggregate income among the elderly and the biggest
single source of income for a majority of Americans aged 65 and older. Compared to the disparity
in interest and dividend income, there is relatively little difference between the average monthly
Social Security benefit and the highest monthly benefit. This is because the Social Security
benefit formula limits the maximum amount paid to a retired high-wage earner to about 150% of
the amount paid to a career-long average-wage worker.
Social Security and public assistance together provide more than 90% of all income for the
poorest 25% of the elderly population. These public programs have contributed greatly to
reducing poverty among the elderly. The reduction in poverty among older Americans is one of
the most significant public policy successes of the past half-century. Poverty among those aged
65 and older has fallen from one in three older persons in 1960 to fewer than one in ten today.
Nevertheless, the poverty rates remain high for older women, minorities, the less-educated, single
persons, and those over age 80.
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Income and Poverty Among Older Americans in 2008

Author Contact Information

Patrick Purcell

Specialist in Income Security
ppurcell@crs.loc.gov, 7-7571

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