Seniors Prospered in The 1990s
July 15, 2002
Seniors' rising medical expenses in the 1990s were largely offset by rising incomes, say researchers. In fact, the elderly received the lion's share of income gains during the last decade, according to census data.
Seniors have the lowest poverty rate of any age group.
- Just 9.9 percent of those 65 and over were below the poverty line in 1999 -- compared to 12.8 percent in 1989.
- By contrast, poverty among children under 18 dropped to 16.1 percent from 17.9 percent -- and those in the 18 to 64 age group actually saw a slight rise in poverty.
- Retirement income as a share of peak after-tax lifetime income approached 87 percent for seniors in 1999 -- up from 80 percent in 1989.
- After paying taxes, households in the lowest 25 percentile income bracket had retirement income equal to pre-retirement income, according to Rand Corporation economist James P. Smith.
However, future health care cost increases may not be offset by rising retirement incomes. By 2005, the elderly will spend 25 percent of their income, on average, on medical expenses, including Medicare premiums, estimates Marilyn Moon of the Urban Institute.
Source: Margaret Pooper, "Economic Trends: They Really Were the Golden Years," Business Week, July 22, 2002.
For Business Week text
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