Research Shows 65-Plus Income May Be 30% Higher

The income of households headed by people aged 65-plus may be much higher than estimated by the Current Population Survey. An analysis of 2012 data by Census Bureau researchers finds substantial underreporting of retirement income when compared to administrative records. Among older Americans who receive retirement income, the researchers say, none of it is reported 46 percent of the time! Here are some other startling findings from the analysis...

• The 2012 median income of householders aged 65 or older was 30 percent higher based on administrative records versus the Current Population Survey—$33,800 reported by the CPS and $44,400 based on administrative records.
• The poverty rate of people aged 65 or older was 2.1 percentage points lower (6.9 percent instead of 9.0 percent). 
• The income drop after retirement is much smaller than has been estimated based on CPS data. "We do not find large, abrupt declines in income or increases in poverty upon retirement," say the researchers. 

The analysis is based on 2012 CPS data, prior to the Census Bureau's 2014 redesign of the Current Population Survey to better capture retirement income. In the future, the researchers hope to evaluate the effectiveness of the redesign in capturing more retirement income.

Source: Census Bureau, Do Older Americans Have More Income Than We Think?