Showing posts with label STANDARD OF LIVING 2012. Show all posts
Showing posts with label STANDARD OF LIVING 2012. Show all posts

September 1, 2012

Big Income Losses for Those Near Retirement

August 23, 2012, 2:00 pm   NYT

By CATHERINE RAMPELL

 
Another reason, besides the housing bust, that Americans nearing retirement age may have suffered most from the financial crisis: The typical American 55 to 64 years old has a household income almost 10 percent less than it was when the recovery officially began three years ago, according to a new report from Sentier Research.

The report found that after adjusting for inflation, the median household income for Americans of all ages was 4.8 percent lower in June 2012 than it was when the recovery technically started in June 2009, to $50,964 from $53,508.

The decline looks even worse when comparing today's incomes to those when the recession began in December 2007. Then, the median household income was $54,916, meaning that incomes have fallen 7.2 percent since the economy last peaked.

Income losses vary significantly by age, though. Householders between the ages of 55 and 64 have taken the biggest hit; their household incomes have fallen to $55,748 from $61,716 over the last three years, a decline of 9.7 percent.

Younger Americans also sustained huge earnings cuts. The inflation-adjusted median household income for those 25 to 34 fell 8.9 percent, while that for people under age 25 fell 6.1 percent.
Incomes for the oldest Americans, on the other hand, have risen steadily since the recovery began.

Among householders between the ages of 65 and 74, the inflation-adjusted median household income rose 6.5 percent (to $42,113 from $39,548), and among those age 75 and older, the increase was 2.8 percent (to $26,991 from $26,244).

It's not clear why incomes rose for older people when everyone else suffered income losses.
This may be because older Americans are working longer than they ever used to, which means they are taking in more income at more advanced ages. Perhaps they are working longer partly to compensate for the decline in the value of their homes. Rising employment rates among older people predate the housing bust, however.