The share of the U.S. population over the age of 65 was 8.1 percent in 1950, 12.4 percent in 2000,
and is projected to reach 20.9 percent by 2050. The percent over 85 is projected to more than double
from current levels, reaching 4.2 percent by mid-century. The aging of the U.S. population makes
issues of retirement security increasingly important.
Elderly individuals exhibit wide disparities in their sources of income. For those in the bottom half
of the income distribution, Social Security is the most important source of support; program changes
would directly affect their well-being. Income from private pensions, assets, and earnings are relatively
more important for higher-income elderly individuals, who have more diverse income sources. The
trend from private sector defined benefit to defined contribution pension plans has shifted a greater
share of the responsibility for retirement security to individuals, and made that security more dependent
on choices they make. A significant subset of the population is unlikely to be able to sustain their
standard of living in retirement without higher pre-retirement saving.