THE IMPORTANCE OF ASSET INCOME AMONG THE ELDERLY

This paper focuses on the income patterns among the elderly. The life cycle hypothesis suggests that income and assets will decline after retirement. Data from the 1980 U.S. decennial census confirms that total income declines for succeeding elderly cohorts. The census data, however, shows that income from assets for elderly cohorts increases until the cohort aged 85 years and older. This pattern is similar for different sex‐marital groups. Recent research that has addressed the issue of savings among the elderly is summarized and four possible explanations for the increase in income from assets found in the decennial census are discussed. We conclude by suggesting the implications of this data for the life cycle theory and public policy.