WP#2007-6  

Abstract

Most studies of retirement well-being have focused on outcomes for relatively young retirees. Few studies have considered how retirement security changes as older Americans age. Following older adults from age 67 (when most have stopped working) to age 80, this study uses projections of wealth and income to assess how their economic security changes during retirement. Results indicate that typical older adults experience a decline in retirement wealth and income between ages 67 and 80. More than two-fifths of retirees will have significantly less income at age 80 than they did at age 67, with the median decline in income being $16,000 for current retirees and $23,000 for boomers. Some older adults, however, will be better off later in retirement. Approximately two-fifths of retirees will have significantly more income at age 80 than they did at age 67, with the median increase in income being $14,000 for current retirees and $17,000 for boomers. At least some of the change in economic well-being during retirement is related to changes in marital status, health status, living arrangements, and work status.

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Barbara A. Butrica is a senior research associate at the Urban Institute. The research reported herein was performed pursuant to a grant from the U.S. Social Security Administration (SSA) funded as part of the Retirement Research Consortium. The findings and conclusions are solely those of the author and do not represent the views of SSA, any agency of the Federal Government, the Urban Institute, or Boston College. The author is grateful to Matt Resseger for research assistance.