Although poverty rates at older ages have fallen dramatically, some groups continue to receive inadequate retirement income. Looking to the future, there is increasing concern about how well Baby Boomers will fare in retirement. Our research identifies those who are especially vulnerable at older ages, shows how different groups will likely fare in the future, and considers whether most Americans are saving enough for a comfortable retirement.

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More Older Americans are Poor than the Official Measure Suggests (Series/Older Americans' Economic Security)
Author(s): Sheila R. Zedlewski, Barbara Butrica

The Census Bureau’s official poverty measure no longer reflects the true resources or needs of adults age 65 and older. Recent consumption data show that older adults generally require more to cover their basic needs and economic data show that older adults have more resources than are reflected in the official poverty measure. This paper shows the sensitivity of poverty rates for older adults to alternative measures of consumption needs and income resources. The alternative measures all show that number of older adults living in poverty is greater than the official measure indicates.

Posted: May 15, 2008

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Older Americans' Reliance on Assets (Article/Opportunity and Ownership Facts)
Author(s): Barbara Butrica

People think of retirement security as balancing on a three-legged stool, with income from assets, private pensions, and Social Security as the legs. However, despite growing awareness about the importance of saving for retirement, many elderly people cannot rely on their financial assets. According to data from the 2004 Health and Retirement Study, lower-income adults age 65 and older rely less on income from assets and traditional defined-benefit pensions than their higher-income counterparts. Instead, older adults with lower income rely primarily on Social Security and public transfers for their retirement security.

Posted: March 18, 2008

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How the Income Tax Treatment of Saving and Social Security Benefits May Affect Boomers' Retirement Incomes (Series/The Retirement Project Occasional Papers)
Author(s): Barbara Butrica, Karen E. Smith, Eric Toder

Income tax provisions affect the buildup of retirement assets during workers' careers and after-tax income following retirement. This paper uses the Urban Institute's DYNASIM model to simulate how potential changes in the tax treatment of retirement saving, Social Security benefits, and income from assets outside retirement accounts may affect boomers' retirement incomes. Changes in the income thresholds for taxing Social Security benefits have the largest impact on middle-income boomers, while changes in contribution limits for retirement saving plans and tax rates on capital gains and dividends have the largest impact on the highest-income boomers.

Posted: March 14, 2008

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How Many Struggle to Get by In Retirement? (Series/The Retirement Project Discussion Papers)
Author(s): Barbara Butrica, Dan Murphy, Sheila R. Zedlewski

This paper uses data from the 2004 Health and Retirement Study to demonstrate how the poverty rate of adults 65 and older changes using alternative resource and threshold measures. Results show that alternative poverty measures that account for health spending produce higher poverty rates than the official measure, even those that include the value of housing and financial assets. Poverty remains concentrated among singles (disproportionately women), blacks and Hispanics, and adults 85 and older regardless of how it is measured because these populations have relatively little housing equity or financial assets.

Posted: March 07, 2008

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Do Assets Change the Racial Profile of Poverty among Older Adults? (Article/Opportunity and Ownership Facts)
Author(s): Barbara Butrica

According to the federal government, elderly poverty rates among blacks are nearly triple and among Hispanics are more than double those of whites. Data from the 2004 Health and Retirement Study on adults age 65 and older, living alone or with only a spouse, show how assets, which are excluded from the official poverty measure, change elderly poverty overall and between racial/ethnic groups. Adding imputed housing rent and annuitized asset values to resources reduced overall poverty by 1.8 percentage points, but increased racial disparities because blacks and Hispanics have relatively little housing equity or financial assets.

Posted: March 04, 2008

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