Study: Senior Incomes Double with Delayed Retirement

As working habits shift among older Americans with greater labor force participation, so has their dependence on income derived from their own assets.

Despite declines in savings, older Americans have seen income almost double in the past twenty years, according to a paper from Boston College’s Center for Retirement Research. 

In 1990, earnings from employment among Americans aged 65 and older represented 18.4% of senior income, with 24.5% representing income from investments. 


By 2010, employment earnings accounted for 31.2% of senior income, whereas 11.3% derived from investments—the increase largely due to more Americans delaying retirement, according to the paper. 

Finding little evidence that trends in earned income and asset income were closely related as the motive for seniors to continue working, the report suggests three contributing factors.

First, a decline in the availability of retiree health insurance coverage encouraged many older workers to remain in the labor force, in the years prior to Medicare eligibility.

Second, pension coverage such as the replacement of defined-benefit (DB) retirement plans to defined-contribution (DC) plans dissuaded many from retiring, the study notes, as DBs created greater incentive for early retirement since workers could not receive the benefit until they left the job.

Lastly, the study points out a steady increase in the education of older workers, citing that the number of workers aged 65 with a college degree are roughly twice those of workers with less than a high school degree. 

Additionally, the study’s lead authors Barry P. Bosworth and Kathleen Burke believe that incentives for increased labor participation could reflect longer life expectancy, as well as reduced rates of morbidity.

“Overall, we believe that the changes in the source of income of the elderly are consistent with sustained improvement in their economic well-being,” writes Bosworth and Burke.

Read the abstract of the report here.

Written by Jason Oliva

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  • The difficulty with the BCCRR so called “Working Papers” is the quality of the research. Some is superb, some lacking, and some dreadful. This appears to fall into the first category.

    Much of the income tax data on income predates 2005. Other data goes through 2010. Having that information helps one evaluate the conclusions reached.

    Some of the findings were expected but some surprising such as the ratio of those with college education to those without. Working longer into retirement is something all seniors should consider, since it helps with increased benefits from retirement plans as well as Social Security benefits when delayed.

    It was also interesting to see that medical benefits was the biggest reason. While not surprising to see it as one of the biggest reasons it was surprising to see it as the first.

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