Income and Assets of Current and Future Medicare Beneficiaries - PDF document

January 13, 2014 Income and Assets of Current and Future Medicare Beneficiaries January 13, 2014 Alliance for Health Reform Gretchen Jacobson, Ph.D. Associate Director Program on Medicare Policy Exhibit 1 Half of all Medicare beneficiaries had incomes below $23,500 per person in 2013 Income includes Social Security, pensions, earnings, income from assets, rental income, and retirement account withdrawals 1% had incomes above $171,650 5% had incomes above $93,900 50% had incomes below $23,500 25% had incomes below $14,400 SOURCE : Urban Institute / Kaiser Family Foundation analysis of DYNASIM data 2013. 1

January 13, 2014 Exhibit 2 Median per capita income among Medicare beneficiaries varies by beneficiary characteristics in 2013 Race/ethnicity Age Marital Status $29,150 $27,400 $26,400 $23,550 $23,500 $21,050 $20,250 $18,000 $17,200 $16,350 $14,150 $13,300 Total White Black Hispanic Under 65 65-74 75-84 85 or older Married Divorced Widowed Single NOTE: Total household income for couples is split equally between husbands and wives to estimate income for married beneficiaries. SOURCE: Urban Institute / Kaiser Family Foundation analysis, 2013. Exhibit 3 Growth in per capita income is projected to be concentrated among beneficiaries with higher incomes Per Capita Total Income (in 2013 dollars) $120,000 $111,900 95 th percentile $93,900 $100,000 $84,100 90 th percentile $80,000 $69,350 $60,000 $51,000 75 th percentile $41,650 $40,000 $28,250 50th percentile (Median) $23,500 $20,000 25 th percentile $16,400 $14,400 $0 2017 2022 2027 2013 2015 2020 2025 2030 Year NOTE: All incomes are adjusted to 2013 dollars. SOURCE: Urban Institute / Kaiser Family Foundation analysis, 2013. 2

January 13, 2014 Exhibit 4 Half of all Medicare beneficiaries had savings below $61,400 per person in 2013 Savings include retirement account holdings (such as IRAs or 401Ks), savings accounts, bonds and stocks 1% had savings above $3,423,800 5% had savings above $1,112,950 5% had savings above $1,112,950 50% had savings below $61,400 50% had savings below $61,400 50% had savings below $61,400 50% had savings below $61,400 50% had savings below $61,400 25% had savings below $11,300 25% had savings below $11,300 25% had savings below $11,300 25% had savings below $11,300 8% had $0 in savings 8% had $0 in savings 8% had $0 in savings or were in debt or were in debt or were in debt SOURCE : Urban Institute / Kaiser Family Foundation analysis of DYNASIM data 2013. Exhibit 5 Median per capita savings among Medicare beneficiaries varies by beneficiary characteristics in 2013 Median per capita Race/ethnicity Age Marital Status savings among all beneficiaries $89,500 $85,500 $80,000 $70,300 $61,400 $55,050 $42,000 $37,000 $28,050 $14,950 $10,300 $9,300 Total White Black Hispanic Under 65 65-74 75-84 85 or older Married Divorced Widowed Single % with 92% 95% 81% 81% 87% 94% 92% 91% 95% 87% 92% 79% savings Median among those $75,200 $99,750 $18,800 $20,750 $37,600 $99,100 $87,300 $50,000 $90,100 $60,200 $68,800 $33,600 with savings NOTE: Total household savings for couples is split equally between husbands and wives to estimate savings for married beneficiaries. SOURCE: Urban Institute / Kaiser Family Foundation analysis, 2013. 3

January 13, 2014 Exhibit 6 Growth in per capita savings is projected to be concentrated among beneficiaries with more savings Per Capita Total Savings, among all beneficiaries (in 2013 dollars) $1,600,000 $1,470,900 95 th percentile $1,400,000 $1,112,950 $1,200,000 $1,000,000 $896,550 90 th percentile $800,000 $619,600 $600,000 $354,100 $400,000 75 th percentile $234,950 $200,000 $101,150 50th percentile (Median) $61,400 $0 2013 2015 2017 2020 2022 2025 2027 2030 Year NOTE: All savings are adjusted to 2013 dollars. SOURCE: Urban Institute / Kaiser Family Foundation analysis, 2013. Exhibit 7 Half of all Medicare beneficiaries had home equity below $66,700 per person in 2013 1% had home equity above $799,850 5% had home equity above $398,500 5% had home equity above $398,500 50% had home equity below $66,700 50% had home equity below $66,700 50% had home equity below $66,700 50% had home equity below $66,700 50% had home equity below $66,700 25% had home equity below $12,250 25% had home equity below $12,250 25% had home equity below $12,250 25% had home equity below $12,250 21% had $0 in home equity 21% had $0 in home equity 21% had $0 in home equity SOURCE : Urban Institute / Kaiser Family Foundation analysis of DYNASIM data 2013. 4

January 13, 2014 Exhibit 8 Key Findings • Most people on Medicare are of modest means, and half lived on less than $23,500 in 2013 – A small share have high incomes • Most people on Medicare have some savings and home equity, but the range of assets among beneficiaries is wide – Half of all Medicare beneficiaries have less than $61,400 savings – Half of all Medicare beneficiaries have less than $66,700 in home equity • Income and assets are projected to be somewhat greater among the next generation – Much of the growth is projected to be realized among the upper income and asset levels – Median income and assets expected to rise, but only modestly 5