CRS Study Chronicles Post Retirement Income Trends

November 11, 2005 ( - A new Congressional Research Service (CRS) study of post retirement income trends reported that 35% of Americans age 65 and older received income from a private or public pension last year.

Among people age 65 and older who reported income from a government pension, the median annual amount was $15,600 while the median amount received in 2004 was just $6,720 for recipients of private pensions.

The report said that 49% of wage and salary workers between the agesof 21 and 64 participated in employer-sponsored retirement plans last year.

In 2004, 12.2 million people age 65 and older – 34.5% of that age group – received income from a private or public pension. Of this number, 4.1 million had income from a public-sector pension – i.e., from previous employment in the federal, state, or local government – and 8.4 million received income from private sector pension plans. Nearly one-third of pension recipients age 65 and older received income from government-sponsored pension plans.

In 2004, 85% of all government employees worked at jobs that offered retirement benefits, compared to just 56% of private-sector employees.

Many Americans also partially fund their retirements from the income from their private investments. According to the CRS, of the 35.2 million Americans age 65 or older who were living in households in 2004, 19.7 million (56%) received income from assets, such as interest, dividends, rent, and royalties. Most received small amounts of income from the assets they owned. Of all individuals age 65 or older who received income from assets in 2004, half received less than $952.

Income From Work

Significantly, CRS found that earnings from work continue to be an important source of income for older Americans, especially those under age 70. Although there was a trend toward earlier retirement from about 1960 to 1985, over the past 20 years more Americans have continued to work at older ages – either because of economic necessity or to keep busy. In 2004, median earnings for individuals age 55-61 who worked were $34,000, while median earned income for workers age 62-64 was $27,000. For workers 65 and older, the median earned income was $15,000.

Meanwhile CRS data showed that, overall, Social Security was the largest single source of income for older Americans during 2004. Some 69% of Social Security beneficiaries age 65 or older got more than half of their income from the government program. For 39% of elderly recipients, Social Security contributes more than 90% of their income, and for nearly one-quarter of recipients, it was their only source.

The good news in the CRS data came in the area of poverty among the elderly. Poverty among those age 65 and older has fallen from one-in-three older persons in 1960 to one-in-ten today. While the overall rate of poverty is relatively low, it

remains high for women, minorities, the less-educated, and those over age 80.