for every dollar of reported income, compared with 96 cents for every dollar of reported income FOR IMMEDIATE RELEASE spent by high-wealth retired couples. Betsy Jaffe ? Having an IRA or pension account is correlated with surpluses: 71 percent of households with a Director, Marketing and Public Relations surplus had IRAs or pension accounts, vs. 52 percent with a deficit. Employee Benefit Research Institute press-media@ebri.org ? The probability of having a deficit has a positive correlation with catastrophic medical expenses. 202.775.6347 For instance, of those who spent 20 percent or more of their income on medical expenses, 85 percent experienced a budget deficit. In comparison, of those who spent 5 percent or less of their income on health-related costs, only 20 percent experienced a deficit. Pension Income Plays Significant Role in Supporting Retirees’ Spending, New EBRI Study on Spending Patterns Finds ? Housing expenses are by far the largest item in all groups’ budgets. For the average retired household, housing-related expenses accounted for 48 percent of total expenditures for those Washington, D.C. – May 2, 2019 — A new study from the Employee Benefit Research Institute (EBRI) who are retired and 52 percent for those in the labor force. In contrast, their coupled finds that households without pensions or annuities outspent their total income more commonly than counterparts allocated 7 percent less of their total spending to housing in 2015. those with pension or annuities. Specifically, EBRI found that while about a third (34 percent) of households with regular pension/annuity income spent more than their income, nearly half — 46 “With so many American workers heading for retirement, there is a clear need for continued research percent — of households without regular pension/annuity income spent more than their total income on consumption behavior of older Americans and accurate assessment of available financial resources in according to the study. “In the sample, 43 percent of retired single households and nearly two-thirds of order to design better products and policies that help to maintain well-being through retirement, retired couple households reported regular income from pensions or annuities — we know this is likely especially as pension income becomes less of a factor in retirement,” said Ebrahimi. to decline with future generations of retirees,” says Zahra Ebrahimi, EBRI Research Associate and author of the study. “So it is important to understand the role that pension income plays in supporting the “Spending Patterns of Older Households” is available online at www.ebri.org. spending of today’s retirees, as well as the implications of fewer retirees having access to such income.” The EBRI Issue Brief, “Spending Patterns of Older Households,” examines the spending behavior of the About EBRI: elderly in the U.S. population for different marital and retirement subgroups using data from the Health The Employee Benefit Research Institute is a private, nonpartisan, nonprofit research institute based in and Retirement Study (HRS) 2014 and the Consumption and Activities Mail Survey (CAMS) 2015, a Washi supplem ngent ton o , D f t C, he that f HRS. o cus CAM es S c on o health, ntains de sav tailed ings, r spen etird ein mg ent, inf and ormati fin o an n cial on du securi rable tyan issues. d non E dBRI d urable oes not lobby and does not take policy positions. The work of EBRI is made possible by funding from its expenses. The amount being spent is compared with their income, and potential scenarios for financing g m ap em s are bersp and rovid spo ed. n The sors, m w aj ho ority incl o ufd te he a br hoo uad seh rang olds st e ou f pu died bli have c, privat either e, f re or- ach proed o fit an r are d noo nn p t ro hfit e cusp of organizations. For more information go to www.ebri.org retirement. The spending-to-income ratio is also higher for single retirees compared with retired couples; those in lower wealth quartiles had higher spending-to-income ratios than those in higher wealth quartiles. Other major findings include: ? While the average single retiree and retired couple had fairly similar spending-to-income ratios (86 percent and 80 percent respectively), at the median there is a significant difference: the median single retired households spent 112 cents for every dollar of income reported; in comparison, the median retired couple spent 86 cents for every dollar of reported income. ? By wealth quartile, the lowest wealth quartile of single retirees has the highest spending-to- income ratio — spending an average of 131 cents for every dollar of reported income. In contrast, the highest wealth quartile of single retirees spends an average of 63 cents for every dollar of reported income. Meanwhile, the average low-wealth retired couple spends 72 cents