Nonmoney income and the elderly: The case of the tweeners

This paper examines the degree of economic security experienced by the population aged 65 and over. Elderly people in the United States now enjoy an average degree of economic well being that is high relative to the younger population. Within that average there is variance, however. This analysis finds that elderly persons in the lower-middle income range—within 100 and 200 percent of the poverty line—are economically more vulnerable than either those of high income or those below the poverty threshold. Virtually all of the elderly benefit from social security retirement income (OASI) and Medicare. The poor receive in addition substantial means-tested cash and in-kind transfers, and the well-to-do receive enough additional subsidies and tax-free income to leave them better off after government intervention than before it. But those in between—the tweeners—are more likely to rent unsubsidized housing, are less likely to have non-Medicare health subsidies, and are more likely to rely on OASI as their primary source of income. When facing economic or health problems, the only way they can improve their well being is to spend themselves down to penury and thereby qualify for means-tested cash and in-kind transfers, in the form of Medicuid and Supplemental Security Income. Policy implications of these findings are discussed in closing.