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Explanation of the Measures of Income

The income of older adults can be measured different ways depending on the economic unit that is being measured. For example, the unit can be the individual, aged units, consumer units, the household, the marital unit, or other measures. These measures also differ as to whether the unit includes any people under age 65.

Income of Individuals

As noted in Table 1, in 2015 the median income of persons age 65 and older was $22,887. Measuring income for persons, rather than by households, understates the resources available to some persons and overstates the resources available to others. For example, the income from a pension received by the husband is attributed entirely to the husband, even though that income may be shared by the husband and wife. This measure has the advantage that it does not include persons younger than age 65, who would be included in a household measure.

Income of Aged Units

Median income for aged units 65 and older was $30,193 in 2014 [Table 1].   Median income is higher for aged units than for persons because aged units may include more than one person, and an aged unit could include someone younger than age 65 who was still working. Aged units include single persons age 65 and older and married couples. The age of the married couple is the age of the husband if he is 65 or older. If the husband is younger than age 55 and the wife is age 65 or older, the age of the married couple is the age of the wife. This unit of measure allows an assessment of the income of older adults independent of the household in which they are living. Thus, if a single older woman is living with her children, her income as an aged unit would consist entirely of her own income. Thus, this measure may understate the economic resources available to some single older adults.

Income of Households

The median income of households where the householder was ages 65 and older was $38,515 in 2015 [Table 1]. A household consists of all the people who occupy a housing unit.  A household can consist of more than two people, some of whom may be younger than age 65. 

Income of Consumer Units

The average income of consumer units in 2015 was $46,627. Consumer units are defined similarly to households, but may have more people than households.  The average number of people in a consumer unit age 65 and older is 1.7.

 

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