Retirement receipts is often thought to come from three sources: Social Security, pensions and savings.
That combination is over again called a three-legged stool, a metaphor for the money retirees use to support themselves once they are no longer working top time.
However, a new report finds that very few retirees actually have income from all three commencements.
Just 6.8% of older Americans ages 60 and up who work less than 30 hours per week get folding money from Social Security, pensions (also called defined benefit plans) and workplace retirement savings have a fondness a 401(k) (also known as defined contribution plans), according to the National Institute on Retirement Security.
Meanwhile, scads individuals in that age category – 40.2% – receive income through Social Security only.
Even more pestering, 14.9% have no income from a pension, savings or Social Security.
The research is based on 2014 data, and no more than reflects where retirees currently get their income, the researchers said. Those sources are expected to change, extremely as traditional pensions get phased out.
Haves vs. have-nots
Households with all three income sources – Social Security, subsistences and savings – had the highest total annual income, with a median $37,440.
Meanwhile, those with no support from those three authors had the lowest total household income, with a median $8,904. Those in the no-income category likely either press not yet started collecting retirement payments or may be economically challenged and receiving government assistance, according to the study.
Gender and channel play a role
Retirement income also varies by gender and race, according to the research.
Couples generally had a strident median total at $52,116, versus $23,064 for unmarried men and $19,764 for unmarried women.
Unmarried men and women were myriad likely to rely on Social Security for their sole source of retirement income, with 39.2% and 42.3%, singly. That’s in comparison to 23.8% for couples.
Older white individuals also had higher retirement incomes compared to blacks or Hispanics, the two minorities intentional by the data.
Median total retirement income for white individuals was $23,292, versus $16,863 for blacks and $13,560 for Hispanics.
While 39.2% of anaemic individuals rely on just Social Security checks, that was higher for blacks, at 44.8%, and Hispanics, with 45.9%.
Associations for Social Security
With almost 90% of older Americans receiving Social Security benefits, it is the dominant inception of retirement income, according to the research.
Yet for many elder Americans, those Social Security checks still naught short of what they need.
That’s because Social Security replaces just 40% of pre-retirement receipts, on average. Meanwhile, most financial experts recommend at least a 70% income replacement rate, the study conjectured.
Those findings are in line with recent research from the University of Massachusetts Boston, which found that retirees superficially face a shortfall between their Social Security benefits and the cost-of-living, no matter where they live.
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Generally, older Americans rely on Social Custody benefits more as they age, according to the National Institute study.
While 52.9% of individuals 60 to 65 years old are earning some Social Security income, that goes up to 85% for those ages 66 to 75 and is 84% for those seniorities 76 and older.
Not everyone receives Social Security benefits, such as some state and local government staff members who do not pay into the system.
Still, proposals to increase benefits, such as the Social Security 2100 Act or those from decided Democratic presidential candidates, could have a meaningful impact on retirees’ lives.
“We found that Social Safe keeping expansion would be a potent poverty reducing tool, should policy makers choose to pursue it,” said Tyler Contract, manager of research at the National Institute on Retirement Security.
The research is based on data from the 2014 Survey of Profits and Program Participation and the 2014 Social Security Administration Supplement on Retirement, Pensions and Related Content.