Demographics a Factor in Retirement Income Sources

Gender, marital status, age, education, and other demographic variables have a significant impact on the likelihood of a worker receiving a retirement annuity and/or employment-based pension income in retirement, suggests a report by the Employee Benefit Research Institute (EBRI).

There is also a strong correlation between these same variables and the amount of pension income received from private and/or public-sector employment-based retirement plans, according to the May 2010 EBRI Notes.  


In 2008, 43.2% of men age 65 and over received annuity and/or pension income, with a mean amount of $19,557 per year. Only 29.4% of women age 65 and over received annuity and/or pension income that year, with mean pension income of $12,137. Hence, a woman age 65 and over in 2008 was only two-thirds (68.1%) as likely to receive an annuity and/or pension payment as her male counterpart, and if she did receive one, her mean benefit was likely to be 62.1% of that received by a man in the same age group. 

EBRI said this finding can be explained by the fact that women age 50 and over in 2008 spent fewer years in the labor force than younger cohorts, generally because of caregiving duties. Because of relatively lower labor force participation rates, women in the older age group are more likely to receive pension income through their husbands, as spouses or survivors, than through their own savings or employment.  

Widows were the largest proportion of women age 50 and over receiving annuities and/or pensions in 2008, at 33.1%. Widows received the lowest mean and median retirement annuity and/or pension income amounts among women of any marital status – $11,794 in 2008 compared with $18,714 for women who were never married.

Other Demographics Affecting Retirement Income Sources 

In 2008, 27.7% of men age 50 and older with a graduate-level education received an annuity and/or pension income, compared with 19.3% of men without a high school diploma, according to the May EBRI Notes. In 2008, men with graduate-level degrees received 4.2 times the median annuity and/or pension income that was received by men without a high school diploma.

The data also indicates the likelihood of receiving an annuity and/or pension income increases with age, until the oldest age group (those age 80 and over), where a lower percentage receives annuity and/or pension income. However, since 1975, the percentage of individuals age 80 and over receiving annuity and/or pension income has been increasing, from 17.7% in 1975 to 37.3% in 2008.

While fewer individuals age 50 and over received pension income from a public-sector plan (7.7%) than from a private-sector plan (12.2%) in 2008, the average amount an individual received from a public-sector plan ($24,147) was considerably larger than that received by a private-sector plan recipient ($13,222). 

EBRI said current trends indicate future retirees may not have a steady income stream in retirement. Fewer employees are participating in a DB plan, which, in the past, almost always paid benefits in the form of an annuity upon retirement, and in today’s workplace, an increasing number of DB plans are offering a lump-sum distribution option at retirement. In addition, DC plans are far less likely to offer an annuity option to retirees than are DB plans. 

The findings are based on an EBRI analysis of the Census Bureau’s 2009 Current Population Survey. 

The May issue of EBRI Notes is here.