Economic Status of the Elderly in the United States

Abstract

American elders saw sharp gains in their incomes and declines in poverty during the 1960s and 70s and have had smaller gains since. Updated poverty measures show that seniors are as likely as children to be poor. When Social Security and pensions are converted to asset values, a typical household approaching retirement in 2007 had net worth of $676,500. Social Security was the largest part (44 percent) and home equity was second (20 percent). The collapse of the housing bubble and the meltdown in the stock market in 2008-2009 significantly eroded asset values. U.S. elders are more likely to be poor than are elders in other OECD countries. The United States faces a smaller challenge from an aging society because our workforce is growing and our Social Security promises are smaller. Small changes in revenues and benefits could securely pay for Social Security and improve benefit adequacy for vulnerable elders.This working paper is based on the chapter “Economic Status of the Aged,” in the Handbook of Aging and the Social Sciences by R.H. Binstock and L. George (eds.), 7th Edition (Oxford: Elsevier, 2011).