Almost one in five elderly American households outspent their income by more than 50% in 2009 and some (14.3%) outspent their income by more than 175%, according to a new report from the Employee Benefit Research Institute.
The most vulnerable groups were singles, households with no pensions, African-Americans and Hispanics.
“Those with an income shortfall are far more likely to be low-income, low-asset households, and they spend down their liquid assets at a far faster rate than households that do not have an income shortfall,” Sudipto Banerjee, EBRI research associate and author of the report, says.
The report showed that Social Security remains the primary source of income for adults over the age of 65. In 2009, households ages 65 – 74 and households with members over 85 received 54% and 66% of their total household incomes, respectively, from Social Security.
According to the report, elderly Americans rely more on Social Security as they age. For households that had members ages 65 – 69 in 2001, the share of household income derived from social security rose from 47% in 2001 to almost 60% in 2009.
Margarida Correia is Associate Editor of Bank Investment Consultant, a SourceMedia publication.
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