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Household income drops 29% after age 65

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Average household income of seniors ages 65-69 is 29 percent lower than it was between the pre-retirement ages of 55 and 59, new research reveals. The Employee Benefits Research Institute discloses this finding in the September 2013 edition of “Notes,” a monthly newsletter published by EBRI’s Education and Research Fund. The research results are based on data from a University of Michigan “Health and Retirement Study,” a national survey of older Americans.

The study tracked, in part, the income of 1,465 individuals who were ages 50-59 (inclusive) in 2000 and whose marital status was unchanged in 2010 when they were ages 65-69. Also surveyed were 3,358 individuals who were in an age range expanded by five years (ages 55-64 in 2000) and whose marital status was unchanged in 2010, when they were ages 65-74.

The report shows the average household income the surveyed individuals had in 2000 was $111,177, when they were ages 55-59. Average household income dropped to $78,437 in 2010 when they were ages 65-69. During the same period, the group’s median household income fell to $54,839 from $88,002, a 38 percent decline.

The research reveals also that more than 42 percent of the group had a post-65 to pre-65 income ratio of 80 percent or greater. Nearly 14 percent had a post-65 to-pre-65 income ratio of less than 30 percent. And 17 percent and 26 percent, respectively, had income ratios of between 30 percent and 50 percent and between 50 percent and 80 percent.

The report adds that the bottom (first) income quartile (based on income reported in 2000) received 156.4 percent of their 2000 income while those in the top (fourth) income quartile received only 58.7 percent of their 2000 income. The second and third quartiles had average post-65 to pre-65 income ratios of 100.1 percent and 80.5 percent, respectively.

“It is not entirely clear what factors led to the increase in average income for households in the bottom quartile,” the report states. “One possible reason could be…that only 24 percent of households in the bottom quartile were dual-earning households in 2000. But in 54 percent of these households, both members claimed Social Security benefits in 2010.

“For low earners, Social Security replaces a higher proportion of their labor earnings, and adding spousal benefits to that might exceed the labor earnings of single-earning households,” the report adds.




55-59 (2000)



65-69 (2010)