The State of America’s Retirees

Via Economist’s View, a new study presented at a National Bureau of Economic Research conference examines the wealth of Americans 70 years old and older between 1993 and 2008. It uses data from the Health and Retirement Study, which gives retirees surveys every two years until their death.

On the bright side:

Between 1993 and 2008, it found, unmarried older individuals had median wealth of about $165,000 roughly a year before they died — a figure that includes current and future Social Security income, job-related pension benefits, home equity and financial assets. In the same period, the median wealth for continuously married senior citizens, roughly a year before they died, was more than $600,000.

Not bad you might say. But on the other hand:

[A]bout 46 percent of senior citizens in the United States have less than $10,000 in financial assets when they die. Most of these people rely almost totally on Social Security payments as their only formal means of support…

More than a little depressing. And as the article notes, this doesn’t provide much of a cushion to protect against a wide variety of shocks. Co-author James Poterba frames the policy implications like this:

“There is a lot of divergence in how people are doing,” Poterba says. Those disparities also complicate the public-policy issues relating to the new findings.

“One of the clear messages is that it is very hard to do a one-size-fits-all retirement policy,” Poterba says. “We need to recognize that, for example, if we were to substantially reduce Social Security benefits for those later in life, that there is a share of the elderly households for whom that would translate very directly into reduced income, because they seem to have accumulated little in the way of financial resources.”

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