One-in-Five Elderly Outspend Income

February 19, 2013 ( - About 60% of elderly American households spend less than their incomes.

However, in 2009 more than 14% of older households spent considerably more than their income, according to a report by the Employee Benefit Research Institute (EBRI). Singles, households with no pensions, African-Americans and Hispanics have larger shares of households with deficits. Health care and home-related expenses are the biggest drivers of income deficit. 

Specifically, the report says in 2009, 14.3% of households with members ages 65 and older had spending that exceeded 175% of their household income. One-in-five households (19.2%) age 65 outspent their income by 50% or more.

The report also confirms earlier research that for all age groups above 65, Social Security remains the primary source of income. In 2009, households ages 65 to 74 and households with members age 85 or older received 54% and 66% of their total household incomes, respectively, from Social Security benefits. Income from pensions and annuities is the second largest source of income for older households.

The importance of Social Security income increases with age. For households that had members ages 65 to 69 in 2001, the share of household income derived from Social Security rose from 47% in 2001 to nearly 60% in 2009.

EBRI’s analysis of the financial condition of elderly is published in the February EBRI Issue Brief, “Income Composition, Income Trends, and Income Shortfalls of Older Households,” which utilizes data from the Health and Retirement Study (HRS) and the Consumption and Activities Mail Survey (CAMS), and tracks data from 2001 to 2009. These studies focus on the income patterns of older U.S. households older than age 50. The full EBRI report is online at