Trends in the Well-Being of the Aged and Their Prospects through 2030

Abstract

The US population over 65 has seen significant and sustained improvement in its absolute and relative well-being over the past half century. This paper offers a survey of trends in old-age poverty, income, inequality, labor market activity, educational attainment, insurance coverage, and health status. It concludes with a brief discussion of whether the favorable trends of the past half century can continue in the next few decades. Even though the absolute and relative positions of the nation’s aged have steadily improved over time, much of the improvement is traceable to public programs like Social Security and Medicare. These programs face gloomy financial prospects. If future voters and lawmakers scale back benefits to keep payroll taxes close to their current level, the nation’s elderly will need to rely on private resources to pay for a bigger fraction of their retirement needs. The statistics on saving and wealth accumulation suggest that relatively few working-age Americans plan to accomplish this by increasing the share of their current incomes they devote to saving. The future economic well-being of the elderly may therefore depend on their willingness to work longer and delay the age at which they rely on public programs and private savings to pay for their consumption.