Older Americans Are Better Off Than Ever

They invested for decades, are working longer and get bigger Social Security checks than past cohorts

By John F. Cogan and Daniel L. Heil. 

"inflation-adjusted income of the median household headed by someone 65 or older rose by 94% from 1982 to 2021. The increase was nearly three times the 35% increase among younger households."

"As of 2018, the adjusted median household income of seniors equaled that of younger households. In 2021, despite Covid, seniors’ adjusted income continued to equal that of younger households."

"over the past four decades, incomes of the poorest 25% of senior households grew faster than those of middle-income senior households. Also, the inflation-adjusted median income of senior households headed by people 75 and older increased by 140%."

"The typical senior household’s inflation-adjusted net wealth in mid-2022 was nearly 200% higher than it was in 1983. Households headed by people now 55 to 64 are positioned to continue this improvement. Their median wealth level is more than double that of today’s retirees when they were the same age."

"The increase in income from investing household savings and higher earnings from working past 65 account for 80% of the growth in the average senior household’s income. News reports that baby boomers weren’t saving enough for retirement were wrong."

"Had Social Security benefits remained at their inflation-adjusted 1982 level, the typical senior household’s income would still have increased by 78%, more than twice as fast as the income of the typical younger household."

"In 2021 the richest 10% of seniors received more than twice as much from Social Security as the bottom 10%."

"Maintaining healthy financial trends for senior citizens requires robust labor and capital markets. Keeping tax rates on work, saving and capital formation low is the best way to ensure that these gains continue."