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These and other data point up the fact that the income status of older Americans has not improved in the last decade at the same rate as it has for other age groups. For the nearly 6 million persons aged 75 and over, this difference is even more striking.

Even when family size is taken into consideration, the per capita income for the aged is relatively lower than for younger age groups. For example, in 1958, with family size taken into account (and children under 13 treated as equivalent in need to only half an adult) the comparative income status of different age groups was as follows:

TABLE 3.-Income per equivalent adult, by age of family head, 1958

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Source: Background Paper on Income Maintenance for White House Conference on Aging, 1961.

Needless to say, the income per equivalent adult for families with aged heads who are retired would be substantially below the overall figure of $1,070.

Savings and assets.-In considering savings and assets of the aged as possible sources of income, the subcommittee feels that while the assets of the aged might be, on the average, greater than those of younger persons, they are not enough to sustain the aged on an independent basis. Furthermore, unlike the young, the aged do not have prospects for accumulating further assets. The assets they do havesuch as their homes--are not easily convertible into cash for meeting day-to-day living expenses or emergencies. There is no great prospect that in the future income from assets and savings will become more important as an assurance of adequate income to aged persons. Larger family size, longer dependency periods for children, and the general trend toward higher living standards, all operate against any substantial reliance on this avenue of adequte income maintenance in retirement.

The possibility that assets of the aged might appear to be greater, on the average, than for the general population should not obscure the fact that the absolute numbers of aged with no liquid assets at all have increased during the past 10 years or more; that the proportion with no liquid assets has remained the same, about 29 to 30 percent, during this period; and that at the present time (as of early 1960), the Survey of Consumer Finances data indicate that at least 40 percent of all spending units with aged heads, and at least 45 percent of all such units with retired heads, had liquid assets of less than $500.

TABLE 4.-Liquid assets of spending units, by age of head, 1960

(In percent)

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We have used the term "at least” because the Survey of Consumer Finances data underestimate the proportions of aged persons with low assets; the survey tends to exclude the less favorably situated older Americans in its tables.

The need for proper interpretation of income changes. In the opinion of the subcommittee, one major flaw characterizes much of the ordinary discussion about the income status of our aged citizens. This is the failure to reckon with the dynamic nature of the problem. For example, when it is said, as above, that the median money income of aged family heads as a percentage of the median income of all families dropped from 60 percent in 1949 to 52 percent in 1959, there seems to be a tacit assumption that the aged of 1959 are the same people as those aged in 1949, but they are not exactly the same. The 4.8 million men and 5.5 million women aged 65 to 74 in 1960 were not "aged” in 1950, for example.

The crucial question is, what change takes place in the incomes of a given age group as it moves into retirement status? When we say that between 1949 and 1959 the income of the male “aged” increased 55 percent, we are really not talking about the same intact population. In reality, the median income of men aged 55 to 64 in 1949 was $2,366, but by 1959, these same men (minus those who died, etc.) experienced not an increase in their median income but a decrease.

More specifically, the best data available on this point are provided by the Bureau of the Census, in its January 1961 report on 1959 incomes. The median income of men born in March 1895, and earlier was $1,710 in 1949; 10 years later, the median income of the same group had decreased 8 percent, to $1,576. These figures, moreover, are in current dollars and not constant ones: an analysis using constant 1959 dollars would reveal that this group of men suffered an approximate 33 percent decrease in real income from 1949 to 1959, while during the same period of time, the real median income for men aged 24 to 34 in 1949 increased by approximately 57 percent; for men aged 34 to 44 in 1949, the increase was approximately 34 percent.

The same analysis can be applied to the changes in assets and savings. In all of these trends, it is important to recognize another aspect that is too often neglected, namely, the effect of rising expectations in the general population-expectations which do not automatically abate upon retirement. This aspect further aggravates the

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1 Derived from data in “Income of Families and Persons in the United States,” Current Population Reports: Consumer Income, Bureau of Census, 1959: Jan. 5, 1961.

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problem of an adequate income for future generations of retired Americans. An increasing number of such persons will be more insistent on an adequate level of living than past generations of retirees. The younger Americans of today will carry into their own retirement of tomorrow many expectations and aspirations that cannot be met if their retired income status is no better than that of the aged of the present time.

TABLE 5.—Median income of men, by age, for the United States: 1959 and 1949

[In current dollars)

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TABLE 6.—Median income of men in 1959 and 1949, by period of birth, for the

United States

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In large part, this discrepancy in incomes of the aged and of younger groups stems from the fact that only 18 percent of aged men and about 4 percent of aged women are employed on a yearround full-time basis. The increasing proportions of aged persons retired from the labor force, with the resultant sharp decrease in income, form the basis of national concern. In most of its work, the subcommittee has been particularly concerned about the retired segment of the aged population. As the following table indicates, the income of retired and part-time employed aged persons is substantially below that of year-round, full-time employed aged persons.

TABLE 7.-Median incomes of aged year-round full-time employed family heads and

unrelated individuals and of all other aged persons, 1959

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As of 1960, less than one-fourth of all the aged were receiving income from full- and part-time employment, slightly less than 4 million (including nonworking wives of earners), and as reported by the subcommittee last year the major source of income for the aged, in terms of numbers covered, continues to be our system of old age and survivors insurance: as of October 1960, nearly 12 million older persons (men 65 and over, women 62 and over) were receiving such social security benefits. The average monthly amount received by retired workers under this program was $74.02 as of the same date; for those retiring in the month of October 1960, the average benefit amount was $79.08.

The other important public program of retirement income is that of old age assistance, covering less than 2.4

million persons. Of this number, about 700,000 are also receiving OASI benefits, since their social security benefit amounts need to be supplemented. The average monthly payment as of October 1960 was $69.45. TABLE 8.- Estimated number of persons aged 65 and over in the United States 1

with money income from employment or public programs, June 1960

Type of money income

Percent

Number (in
thousands)

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Total population aged 65 and over.
Employment, total 2

Employment and no income from public programs..
Employment and social insurance benefits..

Employment and payments under other public programs.
Social insurance (retirement and survivor) benefits, total : 4

Benefits and no earnings or veterans' or public assistance payments..
Benefits and veterans' payments.

Benefits and public assistance.
Veterans' pension or compensation, total 4.

Veterans' payment and no earnings, social insurance or assistance. Public assistance, total 5.

Public assistance and no payments under other public programs No income from employment or public programs..

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1 The 50 States, the District of Columbia, Puerto Rico, and the Virgin Islands. 2 Includes 3,030,000 earners and an estimated 850,000 nonworking wives of earners. 3 Includes persons with income from one or more of the following sources: old-age, survivors, and disability insurance, railroad retirement, and Government employees retirement (see table 1). Excludes persons with benefits under unemployment or temporary disability insurance or workmen's compensation programs. 4 Includes estimated number of beneficiaries' wives not in direct receipt of benefits.

& Old-age assistance recipients and persons aged 65 and over receiving aid to the blind or to the permanently and totally disabled, including a small number receiving vendor payments for medical care but no direct cash payment. 0 Includes a small number with some earnings.

a Source: U.S. Department of Health, Education, and Welfare, Social Security Administration, Division of Program Research.

TABLE 9.-Current social security program operations, October 1960

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Aged (62 and over) 1_
Young survivors and dependents ?

Disabled workers (aged 50-64).
Monthly benefit payments :

Aged (62 and over) !.
Young survivors and dependents 2

Disabled workers (aged 50-64).
Average old-age (retired worker) benefit.
Average old-age benefit awarded in month.
Average disabled worker benefit.
Assets in OASI trust fund..

Assets in disability trust fund..
Public assistance: 4

Recipients of old-age assistance.
Total payments, old-age assistance.
Average monthly payments: Old-age assistance.

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1 Includes wife beneficiaries under age 65 with child beneficiaries in their care and other women aged 62-64about 152,000 and 893,000 respectively, as of the end of October 1960. There is still some duplication resulting from dual er titlements-persons receiving both an old-age benefit and a wife's or husband's benefit-an estimated 25,000 as of the end of June 1960.

In addition to widowed mothers under age 62, survivor children and children of retired and disabled workers, includes disabled children aged 18 and over with a total disability which began before age 18 (99,000 as of the end of October 1960).

• Current-payment status; excludes adjustments for over and under payments, etc.

* Except for general assistance, includes vendor payments for medical care and cases receiving only such payments. Recipients total not adjusted for persons receiving general assistance and other assistance, Payments total exceeds sum of items because of inclusion of vendor payments for medical care from general assistance and special medical funds; data for such expenditures partly estimated.

Source: U.S. Department of Health, Education, and Welfare, Social Security Administration, Division of Program Research.

TABLE 10.-Estimated total payments to persons aged 65 and over in the United States under public income-maintenance programs, 1950 and 1960

[In millions]

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No detailed estimates have yet been determined for what would be an adequate budget for all the various categories of aged persons. However, there is now available an interim revision of a budget for a retired elderly couple in reasonably good health for their age, requiring no unusual medical or other services, and keeping house by themselves in a 2- or 3-room rented unit in selected urban areas. But even this most recent study fails to provide complete enough information, since the proportion of retired elderly couples living in rented units makes up only a minority of all retired aged persons; most retired couples live in homes they own, and there are several million widowed men

“Budget for a Retired Elderly Couple: Interim Revision by the Bureau of Labor Statistics," Research and Statistics note 29, Social Security Administration, Division of Program Research, December 6, 1960.

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