Rich Man Poor Man

Three out of five of this year’s Forbes top 100 richest Americans were older adults 65 years and older. These affluent older Americans individually own enough capital to compare with most developing countries. But poverty is the side that we are more likely to hear when we discuss income of older adults. Income of older adults sits along a very very long continuum.  Therefore, talking about average income of older adults hides these extremes.

Most reports on income among older adults talk about poverty.  The reason is easy is to see. In a 2009 Congressional Report, Patrick Purcell reported the median income of individuals aged 65 and older as $18,208. The same report finds that one in four had incomes of less than $11,139.  It is not surprising that for 41% of elderly recipients, Social Security accounted for more than 90% of their total income. Even when older adults worked to supplement their income—the reality for 20% of individuals aged 65 and older in 2008—the median earnings of workers aged 65 to 69 were $25,000.  Clearly, Social Security on its own elevates some older adults out of poverty.

The rate of poverty among older Americans fell from 33% in 1960 to 9.7% in 2008—a rate lower than poverty rates among children under age 18 (19%) and adults aged 18 to 64 (11.7%). However, this low overall rate of poverty among older Americans is not shared by older women (unmarried and/or widowed), minorities, less educated, and adults over the age of 80.

Wealthy older adults comprise the opposite facet of this reality. The Social Security Administration Chartbook of 2008 (the most recent) reports that 23% of older adults aged 65 and older reported incomes of $50,000 or more; while 8% had incomes of more than $100,000.  There is a stark contrast between the very poor and very rich older adults.

A Pew Research study in 2009 asked a sample of adults to identify the most prevalent conflict in America. After conflicts of immigration—nearly half of respondents (47%) identified conflicts between the rich and poor as the most important social conflict. In this same survey, older adults are significantly less likely to see such conflict than those under the age of 50 (36% vs. 51%).

These contradictory worlds—extremely wealthy older Americans and their poor neighbors— highlight why some programs should address needs rather than age. Surprisingly, these two obvious extremes among older adults share a common behavior.

In the Anatomy of a Giver, Tim Stafford reports that in the United States both the poor (those making less than $20,000 per year) and the rich (those making more than $100,000 per year) give the highest percentages of their income to charity. Middle-class Americans—those making between $40,000 and $100,000 per year—donate at the lowest percentage.  Older adults are a disparate group. The older we get the more variance there is among our peers. One such measure of variance is income. We do however share at least one attribute. This attribute is our appreciation that our lasting legacy is to give back.