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Income and Assets of Medicare Beneficiaries, 2013 – 2030

Savings of Medicare Beneficiaries

In this analysis, the total savings of the Medicare population includes retirement account holdings (such as IRAs or 401Ks) and other financial assets, including savings accounts, bonds and stocks. Savings are presented on a per person basis; for married people, savings are divided equally between spouses to calculate per capita savings. Projected growth in savings is adjusted for inflation and all dollar amounts are in 2013 per capita dollars.

In 2013

In 2013, nearly all beneficiaries (92%) had some savings, but eight percent had no savings or were in debt (i.e., negative savings), with median debt of $800.  Half of all beneficiaries had savings below $61,400, with substantial variation in savings across beneficiaries (Exhibit 4).  One-quarter of beneficiaries had savings below $11,300, including beneficiaries who had no savings or were in debt. At the other end of the distribution, five percent had more than $1.1 million in savings, including one percent who had more than $3.4 million in savings in 2013.

Exhibit 4.  Half of all Medicare beneficiaries had savings below $61,400 per person in 2013

Exhibit 4. Half of all Medicare beneficiaries had savings below $61,400 per person in 2013

Like income, savings among beneficiaries varied greatly across demographic characteristics (Exhibit 5).  While nearly all beneficiaries (92%) had some savings, rates of savings were lower among some groups, particularly black beneficiaries (81%), Hispanic beneficiaries (81%), beneficiaries under the age of 65 with disabilities (87%), and beneficiaries who were divorced or single (87% and 79%, respectively).  Median per capita savings among white beneficiaries ($89,500) was more than eight times higher than median per capita savings among black beneficiaries ($10,300) or Hispanic beneficiaries ($9,300).  Median per capita savings among beneficiaries under the age of 65 and disabled ($28,050) was lower than for seniors of any age group; among seniors, those ages 85 and older had relatively low savings, with more than half having less than $37,000 in savings in 2013.  Median savings also differed by marital status and was higher among married beneficiaries ($80,000) than among divorced, widowed, or single beneficiaries ($42,000, $55,050, and $14,950, respectively).  Median per capita savings was higher among beneficiaries with more years of education; the median savings of college-educated beneficiaries ($216,200) was more than 20-times higher than the median savings among beneficiaries with less than a high-school education ($10,150; Table 1).

Exhibit 5.  Median per capita savings among Medicare beneficiaries varies by beneficiary characteristics in 2013

Exhibit 5. Median per capita savings among Medicare beneficiaries varies by beneficiary characteristics in 2013

In 2030

Median savings among the Medicare population in 2030 is projected to be somewhat higher than among the current generation of beneficiaries, after adjusting for inflation, with much of the growth in savings expected to be realized among a minority of beneficiaries (Exhibit 6).  Among beneficiaries in the top five percent of the savings distribution, savings are projected to be almost $358,000 higher for the next generation of beneficiaries, compared to the current generation of beneficiaries, after adjusting for inflation.  In contrast, among beneficiaries in the middle of the savings distribution, savings are projected to be almost $40,000 higher in 2030 than in 2013, after adjusting for inflation.  This points to a widening gap in savings between beneficiaries in the top five percent and middle of the distribution.  In 2030, twenty-five percent of beneficiaries are projected to have savings below $24,750, including 6 percent of beneficiaries who are projected to have no savings or be in debt, and about half are projected to have savings below $101,150 in 2030.  At the other end of the spectrum, ten percent of beneficiaries are projected to have savings above $896,550 and more than five percent are projected to have savings above $1.4 million in 2030, after adjusting for inflation.

Exhibit 6.  Growth in per capita savings is projected to be concentrated among beneficiaries with more savings

Exhibit 6. Growth in per capita savings is projected to be concentrated among beneficiaries with more savings

Income of Medicare Beneficiaries Home Equity of Medicare Beneficiaries