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In the U.S., Income and Wealth are Concentrated at the Top. Where Does This Leave Older Americans?

Posted on October 25, 2022

Disparities in income and wealth among older Americans have widened in recent decades. Higher income and wealth are both associated with better prospects for living a long life.

So where does this leave older Americans?

Today’s WatchBlog post looks at our new report on these trends with older Americans and retirement, as well as what we can see happening in three other countries with large economies—Canada, Germany, and the United Kingdom.


Illustration of people on a global map


How does the U.S. compare?

In some ways, we are similar to the countries we reviewed. In the United States and the United Kingdom, older people who have higher incomes and more wealth are likely to live longer. Additionally, in all three countries and the United States, we found that getting an education and owning a home may be critical to getting a good job and saving enough to maintain lifelong financial security.

In other ways, the countries differ substantially. For example, Germany, unlike the United States, provides long-term health care insurance for its older citizens without spending substantially more than other countries.

Disparities are bigger in the United States.

For households headed by older Americans, income and wealth gaps are significantly wider than for households headed by their Canadian, German, or U.K. counterparts.

This U.S. trend in disparities persisted across the 20-plus years of data we reviewed. For example, in 2007, the median, or “typical,” income of high-income older households in the United States was about 12 times greater than that of low-income households, compared to about 6 times in Germany and about 10 times in the United Kingdom.

What does this mean for our aging citizens?

We have previously shown that including the expected value of future payments from Social Security and defined benefit retirement plans generally reduces wealth disparities. However, the extent to which expected benefits from defined benefit retirement plans continue to reduce wealth disparities among future retirees could diminish. Although defined benefit plans provide substantial financial resources to many of today’s retirees, we have reported on a decades-long shift away from employers in the United State offering these types of plans. We also reported on steps other countries are taking to encourage savings in defined contribution plans, as defined benefit plans become less available.


Photo showing someone planning retirement savings


Find out more about how trends in older Americans compare with those in Canada, U.K., and Germany in our new report. You can also learn about our recent work on retirement security by checking out our Retirement Security Topics.

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