Do Census Data Understate Retirement Income?

The brief’s key findings are:

• Some claim that retirees are better off than many think, because Census’s Current Population Survey (CPS) does not capture most 401(k)/IRA income.

• Indeed, the CPS dramatically under-reports 401(k)/IRA income, a serious problem given the shift from defined benefit to defined contribution plans.

• Interestingly, though, the problem is largely concentrated among upper-income households, which hold most of the 401(k)/IRA wealth.

• As a result, the CPS currently provides a reasonably good measure of retirement income for the typical middle-income household.

• Moreover, Census is currently testing ways to improve the CPS survey design to better incorporate all sources of retirement income.