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Wide Disparities in the Income and Assets of People on Medicare by Race and Ethnicity: Now and in the Future

Section 4: Projected Growth in Income, Assets, and Home Equity

This section presents projections of income, assets, and home equity for the Medicare population in 2030, and examines changes during the period between 2012 and 2030, to explore the extent to which future generations of Medicare beneficiaries will be more economically secure than the current generation. Data in this section are adjusted for inflation; all dollar amounts are in 2012 per capita dollars.

Key Findings

  • In 2030, the Medicare population is projected to have somewhat higher incomes than current beneficiaries; median per capita income is projected to rise from $22,500 in 2012 to $28,600 in 2030, with income increasing unevenly across race/ethnicity. In 2030, median income is projected to be substantially higher for white beneficiaries ($32,800) than for black and Hispanic beneficiaries ($19,000 and $18,100, respectively).
  • By 2030, the racial/ethnic differences in shares of beneficiaries with savings are projected to narrow, with the share of black and Hispanic beneficiaries with savings projected to grow to 89 percent and 88 percent, respectively, but remaining slightly lower than the rate among white beneficiaries (97%).
  • The gap in savings across race/ethnicity is projected to widen by 2030; while median savings for white beneficiaries is projected to increase by about $61,100, this is more than double the absolute dollar increase in median savings for black and Hispanic beneficiaries ($22,600 and $23,650, respectively) between 2012 and 2030. The increase in savings for future generations largely reflects the higher prevalence of retirement account pensions among these beneficiaries during their working years compared to current beneficiaries. These higher savings amounts (that result in higher IRA withdrawals) are largely offset by lower pension incomes compared to current beneficiaries.
  • The share of Medicare beneficiaries with home equity and the median home equity value among those with home equity is expected to increase between 2012 and 2030. However, among beneficiaries with home equity, the growth in median home equity  is projected to be higher for white beneficiaries ($18,850) than black and Hispanic beneficiaries ($5,200 and $5,950, respectively) between 2012 and 2030, leading to widening racial/ethnic disparities in home equity values among the next generation of Medicare beneficiaries.

 Section 3: Home Equity                                                                                                                                                                         Appendix  

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Section 4: Projected Growth in Income, Assets, and Home Equity

exhibits

8477 Income and Assets - Exhibit 4.1
Projected Growth in Median Per Capita Income Among Medicare Beneficiaries, by Race/Ethnicity, 2012 and 2030

In 2030, the Medicare population is projected to have somewhat higher incomes than current beneficiaries; median per capita income is projected to rise from $22,500 in 2012 to $28,600 in 2030, with income increasing unevenly across race/ethnicity. In 2030, median income is projected to be substantially higher for white beneficiaries ($32,800) than for black and Hispanic beneficiaries ($19,000 and $18,100, respectively). 

8477 Income and Assets - Exhibit 4.2
Projected Growth in Median Per Capita Savings Among Medicare Beneficiaries, by Race/Ethnicity, 2012 and 2030

By 2030, the racial/ethnic differences in shares of beneficiaries with savings are projected to narrow, with the share of black and Hispanic beneficiaries with savings projected to grow to 89 percent and 88 percent, respectively, but remaining slightly lower than the rate among white beneficiaries (97%). The differences in the amount of savings across race/ethnicity is projected to widen by 2030; median savings for white beneficiaries is projected to increase by about $61,100 – more than double the absolute dollar increase in median savings for black beneficiaries and Hispanic beneficiaries ($22,600 and $23,650, respectively) between 2012 and 2030.

8477 Income and Assets - Exhibit 4.3
Projected Growth in Median Per Capita Home Equity Among Medicare Homeowners, by Race/Ethnicity, 2012 and 2030

Overall, the share of Medicare beneficiaries who have any home equity is projected to increase slightly from 78 percent in 2012 to 80 percent in 2030, with higher rates among whites (85%) than among black (67%) or Hispanic (65%) beneficiaries that year. Among beneficiaries with home equity, the growth in median home equity values is projected to be more than three times higher for white beneficiaries ($18,850) than black and Hispanic beneficiaries ($5,200 and $5,950, respectively) between 2012 and 2030, leading to widening racial/ethnic disparities in home equity values among the next generation of Medicare beneficiaries.

Section 3: Home Equity Appendix