A typical Illinois senior citizen’s annual income equals 55 percent of younger residents’ pay, falling short of the 70 percent benchmark generally needed to maintain one’s lifestyle in retirement, a new study shows.
Nationally, the median income for those who are 65 and older equals 60 percent of the median income of people ages 45 to 64. Illinois had the nation’s 11th-biggest gap, according to Interest.com, a unit of Bankrate.com.
In the two lowest-ranking states, Massachusetts and North Dakota, people age 65 and older are unable to replace even half of their younger counterparts’ income, Interest.com said. Massachusetts seniors faced the biggest income gap for the second consecutive year.
The only two places where people met the threshold were Washington, D.C., at 74 percent, and Nevada, at 71 percent. Interest.com said Washington likely fares well because it has a large number of retired federal workers with pension plans.
Interest.com examined the Census Bureau’s 2013 American Community Survey. For each state and Washington, D.C., Interest.com divided the median annual household income for those 65 and older by the median annual household income for those ages 45 to 64. Interest.com said the Census broadly defines income as including wages, salaries, tips, Social Security, welfare, interest, dividends, pensions, income from such defined contribution retirement plans as 401(k) plans and IRAs, rental properties and royalties.
People 65 and older are able to replace at least 60 percent of their younger counterparts’ annual incomes in 28 states and Washington, D.C. Rounding out the top five are Hawaii, 69 percent, Arizona, 68 percent, and Mississippi, 68 percent.
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