The Economic Status of the Elderly

In the first part of the paper using official data sources, we estimate the real income of the elderly and of the rest of the population during the 1570s. We find that income per household of the elderly has increased more rapidly than income per household of the rest of the population, even though the elderly's fraction of income from work decreased greatly. In the rest of the paper we use the 1969 and 1975 Retirement History Surveys to estimate income, wealth and inflation vulnerability of households whose heads were ages 58 through 63 in 1969. The income data verified the results from the official data. The 1969 wealth data show that a representative person on the eve of retirement has small holdings of financial assets: most of the assets are in housing, Social Security and Medicare. Between 1969 and 1975 real wealth increased slightly on average. There was some tendency for the distribution to tighten. We found that contrary to popular opinion, on average the elderly are not especially vulnerable to a sudden increase in either prices or the rate of inflation. Most of their assets are inflation protected. The wealthy are most vulnerable to inflation.