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Social Security Averages Just 40% of Elderly Income

By Stephen Miller  6/4/2010

Social Security was the largest source of income for U.S. adults age 65 and older but still accounted for only 40 percent of their income on average, according to a study by the not-for-profit Employee Benefit Research Institute (EBRI).

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.

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, 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 2010 issues of EBRI Notes, is based on 2008 data from the U.S. Census Bureau’s annual March Current Population Survey. Among the main findings:

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.

Income sources for lowest income quintile (less than $8,956): Social Security, 88.4 percent; assets, 4.0 percent; pensions and annuities, 3.4 percent; earnings, 2.0 percent; other, 2.3 percent.

Income sources for highest income quintile (more than $38,468): Earnings, 39.3 percent; pensions and annuities, 22.6 percent; Social Security, 18.6 percent; assets, 17.7 percent; other, 1.8 percent.

Stephen Miller is an online editor/manager for SHRM.

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