Income of the Population 55 or Older, 2004
(Expanded Edition)

Frequently Asked Questions

There are statistics for persons, aged units, and the family income of persons. What is the difference? Which statistics should I use?

The wider variety of tables incorporated in this edition gives more options to users needing information on the income of the aged. The questions asked about the income of the elderly often fall into one of two categories: what income do the elderly provide for themselves and those they live with, and what income is available as a resource for the elderly.

Statistics for persons are based solely on the income and demographic attributes (age, sex, race, Hispanic origin) of each person; no spousal or other family income are included. Tables on person income are designed to provide information on the resources an aged person contributes to their living unit. These tables are not designed to answer questions on the resources available to an aged person.

Statistics for the family income of persons are also based on the demographic attributes (age, sex, race, Hispanic origin) of each person. Total income from all family members (related through blood, marriage, or adoption) is treated as another attribute of the person. If any person in the family has income from a specific source the aged person is considered to be in a recipient family. These tables are designed to answer questions on the resources available to an aged person.

Statistics for aged units treat each marital unit (married couple or nonmarried individual) as one unit. A nonmarried individual has only their income and demographic attributes. The age of a married couple is the husband's age if he is at least 55—unless he is under age 55 and the wife is 55 or older, in which case it is the age of the wife. All other demographic characteristics, including the statistical weight, are that of the husband. Income for the married couple is the sum of both spouses' income; if either spouse has income from a specific source the married couple is considered to be a recipient unit. Tables on aged unit income are designed to be flexible enough to answer both types of questions, but with a couple of qualifications. First, unlike person tables in which each person counts as a unit, aged unit tables treat each married couple as 1 unit and each nonmarried person as 1 unit. Interpreting aged unit tables like a person table will emphasize the economic well-being of nonmarried persons relative to married persons. Second, the aged unit tables exclude the income of other family members, which may not provide a complete picture of the resources available to the unit.

The table below illustrates the differences across units for total money income is taken from Tables 3.A1, 3.B1, and 3.C1. Median income is higher for aged units than it is for persons because aged unit income includes spousal income. Family income of persons 65 or older is higher still because it includes income from all family members, not just a spouse. The number (thousands) is the same for persons and family income of persons because only the attribute of interest (person versus family income) has changed; both are concerned with the same population—persons 65 or older. The number of aged units is lower because a married couple is counted as 1 unit, not 2 persons.

I have seen other statistics on the income of the elderly that are different from these. What would cause these differences?

Statistics may differ across publications because different data are used. Income of the Population 55 or Older uses the March Supplement to the Current Population Survey, which is conducted by the U.S. Census Bureau. Some publications producing statistics on the income of the elderly may use other surveys like the Survey of Income and Program Participation or the Health and Retirement Survey. Still other publications, such as Social Security's Annual Statistical Supplement, use administrative data.

Different publications also may not employ the same procedures for similar statistics. The units (persons, aged units, families, households, and so forth) may differ. One methodology may exclude income or units that another does not.

The statistics below on the average amount of money the elderly received from Social Security illustrate these points. The first column shows the number of beneficiaries 65 or older and median Social Security income from Table 5.A1. The second column shows the number of beneficiaries and average benefit from Table 5.A16 of the Annual Statistical Supplement, 2005. The number of beneficiaries differs because two different sources of data were used. The Annual Statistical Supplement statistics are based on a 10-percent sample of administrative records from Social Security's Master Beneficiary Record drawn for December 2004. The administrative records include institutionalized beneficiaries (for example, in nursing homes and hospitals) and do not rely on accurate self-reporting by the beneficiary to a survey. The benefit amounts differ not only because the data are different, but also because the Income of the Population statistic is the median of the annual amount received and the Annual Statistical Supplement statistic is the mean of the monthly benefit in December 2004.

Why are there only 4 quintile limits?

The quintile limits indicate the boundaries between the quintiles. The bottom quintile has income below the lowest quintile limit with no lower boundary. Likewise, the top quintile has income of at least the highest quintile limit with no upper boundary. The middle quintiles are bounded on the top and bottom by the quintile limits.

Why isn't Social Security differentiated by type of benefit?

Social Security is not broken out by type of benefit because a person may receive more than one type of Social Security benefit (such as retired-worker benefit and spouse benefit). Aged units and families may have even more combinations of benefits (such as one spouse receiving retired-worker benefits and the other receiving disability benefits). For this reason, it also should not be assumed that beneficiary units 65 or older or persons 65 or older in beneficiary families are receiving retirement benefits, even though disability benefits are converted to retired-worker benefits at full retirement age.

Why don't you differentiate between income from defined benefit (DB) pensions and income from defined contribution (DC) plans like IRAs and 401(k) accounts?

We do not publish statistics differentiating between DB and DC pensions because a significant portion of payments from DC plans are not collected in the Current Population Survey. The Census Bureau only includes "regular payments" from retirement, survivor, and disability income in its definition of total money income. Many people do not choose to annuitize their pension accounts and instead make withdrawals from their pension accounts on their own. These withdrawals are not part of total money income, and data are not collected on withdrawals from pension accounts in the March Supplement to the Current Population Survey.¹

Do the statistics on receipt of asset income and the receipt of pension income in Section 2 indicate whether an elderly person has assets or a pension account?

No. The March Supplement of the Current Population Survey does not ask about asset and pension holdings, and not all asset and pension income is included in the Census Bureau's definition of total money income. Two notable exclusions are withdrawals from defined contribution pension accounts and capital gains or losses. Only "regular payments" from retirement, survivor, and disability income are included as pension income. Many people do not choose to annuitize their pension accounts and instead receive lump sums or make withdrawals from their pension accounts on their own. These withdrawals are not included as part of pension or total money income. Using receipt of income from assets or pensions will underestimate asset or pension holdings.

What is the difference between the relative importance of an income source in Sections 9 and 10 and a source's share of aggregate income in Section 11?

The most important difference between the two concepts is that the relative importance of an income source is based on aged units/family income of persons, while a share of aggregate income is an average over dollars. This means that the relative importance of Social Security for an aged unit is calculated by dividing each aged unit's Social Security income by its total income. Based on the ratio of Social Security income to total income, aged units are then placed in the appropriate row of the table (0 percent of income from Social Security, 1 percent to 19 percent of income from Social Security, and so forth). Only aged units with positive total income and nonnegative earnings and asset income are included. The mean at the bottom of each panel is an average of the ratio of Social Security income to total income. The measures of relative importance of income sources in Sections 9 and 10 are designed to examine the resources available to an elderly person or aged unit.

On the other hand, aggregate income shares are designed to answer the question of what income sources the elderly as a whole are providing to their living units. Income provided by the nonelderly (in the case of aged units, spouses may be nonelderly) is excluded, even though it may be considered a resource for an aged person/unit. The Social Security share of aggregate income for persons 65 or older is the total number of dollars of Social Security received by persons 65 or older divided by the total number of dollars received by the elderly from all sources of income. Only the total number of dollars matters for aggregate income shares; neither the number of persons or aged units nor the distribution of money is taken into account.

I can't find the information I need. What are some other sources of data?

A good source of data on Social Security benefits and Supplemental Security Income is in Social Security Administration's Annual Statistical Supplement. It and other data publications from Social Security are located on Social Security Administration Office of Retirement and Disability Policy's data Web site, http://www.ssa.gov/policy/data_title.html.

The Census Bureau also has a series of publications based on the Current Population Survey, the most recent of which is called Income, Poverty, and Health Insurance Coverage in the United States: 2004. Several years of these reports can be accessed through the Census Bureau's Income Web site, http://www.census.gov/hhes/www/income/income.html. The Internal Revenue Service's Statistic of Income Division produces data on income which is accessible through the IRS's Tax Statistics Web site, http://www.irs.gov/taxstats/.

Data on a variety of topics, including income, wealth, and consumption can be found in the Statistical Abstract of the United States through the Census Bureau at http://www.census.gov/statab/www/. The Bureau of Labor Statistics produces a series of reports on consumption from its Consumer Expenditure Survey. These reports and other data on consumption can be found at http://www.bls.gov/cex/. Data on wealth are included in the Survey of Consumer Finances (Federal Reserve Board, http://www.federalreserve.gov/pubs/oss/oss2/scfindex.html), the Panel Study of Income Dynamics (University of Michigan, http://www.psidonline.isr.umich.edu/), and through the Census Bureau's Housing and Household Economic Statistics Division (http://www.census.gov/hhes/www/wealth/wealth.html).

I can't find the answer to my question. Whom do I contact?

If you have questions about how the statistics in this publication were calculated, please contact Lynn Fisher at 202-358-6308. If you would like to request a copy of this publication, e-mail op.publications@ssa.gov. If you have questions regarding the Current Population Survey, please visit the Census Bureau's CPS Web site http://www.bls.census.gov/cps/cpsmain.htm. The technical documentation for the March 2005 Supplement is located at http://www.census.gov/apsd/techdoc/cps/cpsmar05.pdf. If you have questions regarding your personal Social Security records, including benefits and earnings history, please call 1-800-772-1213, visit http://www.ssa.gov/onlineservices/ or contact your local Social Security field office.