Senior Citizens' Incomes Fall Short in 48 of 50 States

Jun 10, 2013, 08:00 ET from

CHICAGO, June 10, 2013 /PRNewswire/ -- Conventional wisdom states that retirees need 70% of the annual income that they earned during their working years. put this theory to the test and found that senior citizens in 48 of the 50 states (plus the District of Columbia) are falling short. Seniors in Massachusetts face the largest income gap in the country; as a group, they are only replacing 45% of younger adults' incomes.

"People who live in a given area are competing with each other for the same goods and services, including housing, cars and groceries," said Mike Sante, managing editor of "This is why we thought it would be useful to compare younger and older adults' incomes in each state. We found that many senior citizens are significantly underfunded and risk running out of money, especially since people are living longer than they used to and may need to support a two- or three-decade retirement." examined the U.S. Census Bureau's 2011 "American Community Survey" (the most recent edition). For each state and the District of Columbia, divided the median annual household income for those who are 65 and older by the median annual household income for those between 45 and 64 years old. Nevada (70.72%) and Hawaii (70.06%) are the only states to reach the coveted 70% threshold.

Those who are 65 and older are able to replace at least 60% of their younger counterparts' annual incomes in 19 states and the District of Columbia. Arizona (68.10%), New Mexico (66.89%) and Florida (66.86%) join Nevada and Hawaii in the top five.

In the four lowest-ranking states – New Jersey (49.53%), Rhode Island (48.20%), North Dakota (48.17%) and Massachusetts (45.21%) – people age 65 and older are unable to replace even 50% of their younger cohort's incomes.

Nationally, the average income for those who are 65 and older equals just 57% of the average income for 45 to 64 year-olds. The fact that Social Security is the primary source of income for a majority of retired Americans – not pensions or retirement savings – goes a long way toward explaining why so many seniors have so little money. The average Social Security payment for a retired worker at the start of 2012 was only $1,230 a month ($14,760 a year).

For the complete rankings of all 50 states and the District of Columbia, click here:

The Census Bureau broadly defines income to include wages, salaries, tips, social security, welfare, interest, dividends, pensions, income from defined contribution retirement plans (such as 401(k)s and IRAs), rental properties, royalties and other sources.


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Ted Rossman
Public Relations Manager, Bankrate, Inc.