Could you make it on the income of these 65+ year olds?

[Life_is_Simple]

I'm very intrigued by some data I found on income amounts and sources for people 65+ (in 2010). These people might be retired, or on the cusp of retirement...

Data come from here - data from the Social Security Administration (http://www.ssa.gov/policy/docs/statcomps/income_pop55/2010/sect10.html#table10.5) -table 10.5, which I "excel-lified" below:

First table is percentages. 2nd table converts those into dollar amounts, to make it easier to think about. I used unmarried singles, but you can also run the number for Married pairs from the data at the link.

http://img31.imageshack.us/img31/751/age65plusincome2010b.jpg

In 2010, the bottom 20% (Quintile 1) of unmarried individuals 65+ had yearly income up to $10,037. 81.7% of it (or $8,200) came from Social Security. The next Quintiles go up to $14,525 (Q2), $20,413 (Q3), $34,383 (Q4), and I put a guess of $50,000 (Q5) to be able to calculate dollars.

As people go up from Quintile 1 to 4, their Social Security $$ amount increases from $8200 to $18,551, though their dependence on SS decreases percentage-wise. I'm thinking a significant number of Quintile 5 is still employed and not fully taking Social Security yet.

The higher Quintiles might have a Govt pension, but they also might have IRA (Private pensions) and Asset income.

I'm looking at the dollar amounts and thinking, "Could I actually live on this amount?" even if I had the income of Quintile 4? And would I be generating enough of the IRA and asset income and/or some misc Earnings?

What do they say in the Airplane movies? "I picked the wrong weekend to give up drinking/sniffing glue, etc?":D

[flowerseverywhere]

one of my relatives is right in the middle and lives quite well.

Kids are out of the house and married.
House fully paid for.
before they retired did a bunch of major house stuff, like new roof, new water heater, new appliances etc.
Taxes lower with senior discount for their state.
Don't wear clothes out (not going naked outside I have to clarify when i read this over, but not needing to purchase new clothes often).
Eat much less.
Don't eat out. When she does eat out takes three quarters home for a few meals.
Don't use a lot of fancy gadgets they are constantly updating.
Have basic cable and basic phone. Only have cable to watch the baseball team.
Drives a few thousand miles a year, that's all. Drives cars for years, slowly.

Income from SS (waited until 65 to take which is a big help), some savings and a small state pension. They pay little federal and state tax.

[Zoebird]

My family of 3 is currently living on Quintile 3.

So yes.

[bunnys]

one of my relatives is right in the middle and lives quite well.

Kids are out of the house and married.
House fully paid for.
before they retired did a bunch of major house stuff, like new roof, new water heater, new appliances etc.
Taxes lower with senior discount for their state.
Don't wear clothes out (not going naked outside I have to clarify when i read this over, but not needing to purchase new clothes often).
Eat much less.
Don't eat out. When she does eat out takes three quarters home for a few meals.
Don't use a lot of fancy gadgets they are constantly updating.
Have basic cable and basic phone. Only have cable to watch the baseball team.
Drives a few thousand miles a year, that's all. Drives cars for years, slowly.

Income from SS (waited until 65 to take which is a big help), some savings and a small state pension. They pay little federal and state tax.

That's exactly how I plan on living once I retire from my position as public school teacher. I expect to collect a pension and social security. I will have all my student loans paid off and my house paid off and I think I'll be ok. The only thing I'm looking forward to as my extravagance is overseas travel every year. So I may have to get a little part-time job to make some of the money to do that. But I may not have to...

[dmc]

Could I, yes. Do I want to, NO.

[Life_is_Simple]

Note: In looking through the website, I think Quintile 5 is more like $100,000, so multiply everything in the last column by 2. I'm having a hard time getting a good estimate on that

[Spartana]

One thing that isn't taken into account is regular bank savings that someone may have accumulated and which may be withdrawn over a retired person's life to suppliment their low income from SS or other sources. For instantance my Mom only got $400/month SS and took approx. $100/month out of a trad. IRA. So her income was only $500/month - the amount she needed to pay her basic expenses like utilities, assn. dues, food, etc...Hhowever, she had sold her paid for home and downsized to a much less expensive paid for condo and had approx. $90K left over in equaity to suppliment her $500 monthly income. She used that "Mad Money" to travel around the world and basicly live a nice life - but still a frugal one. So just looking at "income" alone isn't a good gage of how much a person actually lives on each month. Especially when interest rates are so low so that taxable income generated from them is very low - or someone may have much of their assets tied up in tax deferred things and, like my Mom, only take a small amount out each year.

As for living on that amount - i.e. $10K/year - yes I think it is doable and I have been doing it for a number of years. But, like other posters pointed out, I had a paid for, low-cost (taxes, insurance, maintenance) house, no debt, no kids, medical coverage, etc... and money in the bank to use as needed for "extras" or fun beyond my basic expenses. I found that with the paid for place I really only needed approx. $500/month for basics (that includes prop tax, insurance, car reg and insurance as well as food, utilities, and gas for the compact car) although I often used closer to $1000/month because I did budget travel (camping road trips) or occasionally needed extra money for emergencies like getting the heater fixed, etc... Not alot of room for frills, but I like to live like that anyways and even with a higher income now (quit work at 42, lived on savings and started collecting a government pension at 50), I still choose to live a frugal life and just bank the extra. I also have sold the second place and am now renting so it costs me more per month income-wise, but I have much more money in the bank. Will evetually buy another place someday but for now enjoy being a temp renter part of the year and travelling the pother part.

[Fawn]

Yes, I will be able to live easily in any of those quintiles.
By age 61, my house is paid off, my taxes run about $2,000 per annum.
The kids will be through college, or at least done with the part I am commited to paying for.
I have lived frugally all my life, "making do" with $833 per month and unlimited free time is a breeze. Plus, I will have retirement income to double that for travel and grandchild (if I am so blessed) indulgence.
Might inflation affect how I spend my $$$$. Well yes. But I am creative, and not afraid of dying....
I just do not buy into the idea that you have to have $1.5 million in dividend paying stocks before you retire. Yeesh! YMMV.

[Bronxboy]

One thing that isn't taken into account is regular bank savings that someone may have accumulated and which may be withdrawn over a retired person's life to suppliment their low income from SS or other sources. For instantance my Mom only got $400/month SS and took approx. $100/month out of a trad. IRA. So her income was only $500/month - the amount she needed to pay her basic expenses like utilities, assn. dues, food, etc...Hhowever, she had sold her paid for home and downsized to a much less expensive paid for condo and had approx. $90K left over in equaity to suppliment her $500 monthly income.
Money transferred from regular bank savings was an important part of my mother's retirement. She lost about $1000 a month in income after my father died, without a corresponding reduction in expenses. She was able to make up about $600 a month for 9 years until her death with transfers from her savings accounts.

With that income, she was in the fourth quintile, and quite comfortable even in suburban NYC. She had the advantage of not owning a car.

[Maxamillion]

I'm currently in quintile 1 and have been for several years (before that, I had even less money--at one point about 10 years ago, I was living on $450 a month from a part-time job at Wal-Mart, and before that I was in college, making $200 a month doing part-time work in the dining hall--I'm living the high life now.) I live in a small one-bedroom low-income apartment...it being small also helps keep the utility bill down, my car is paid for and I just have liability insurance on it. I also do some gardening and want to learn more about it.

[Gregg]

one of my relatives is right in the middle and lives quite well.

Kids are out of the house and married.
House fully paid for.
before they retired did a bunch of major house stuff, like new roof, new water heater, new appliances etc.
Taxes lower with senior discount for their state.
Don't wear clothes out (not going naked outside I have to clarify when i read this over, but not needing to purchase new clothes often).
Eat much less.
Don't eat out. When she does eat out takes three quarters home for a few meals.
Don't use a lot of fancy gadgets they are constantly updating.
Have basic cable and basic phone. Only have cable to watch the baseball team.
Drives a few thousand miles a year, that's all. Drives cars for years, slowly.

Income from SS (waited until 65 to take which is a big help), some savings and a small state pension. They pay little federal and state tax.

Almost exactly describes my Mom. She is around $17K in income, but manages to save a higher percentage of her's than I do most months!