Private Capacity to Finance Long Term Care. Assets and Homeownership

03/01/1983

Most of the elderly own their homes. The percentage of homeowners tends to rise with income, with the exception of those in the highest income bracket (see Table 4). In addition, couples are much more likely to own a home than are individuals living alone. There are few major differences by age group.

TABLE 4. Percentage of Homeowners by Income and Family Characteristics
(1976 data)
Family
Characteristics
Income Class
Up to $5,000 $5,000 - 10,000 $10,000 - 15,000 $15,000 or above
HEAD AGED 65-74
Single Person Household 54.8 64.0 70.1 63.1
Two Person Household 76.5 83.7 85.2 85.2
HEAD AGED 75 OR ABOVE
Single Person Household 56.7 63.8 60.7 73.1
Two Person Household 76.6 80.7 83.9 80.0
SOURCE: Survey of Income and Education.

The finding of such a large proportion of ownership is important since homeownership helps to ensure lower housing costs for the elderly. Moreover, two-person families are more likely to try to support one disabled member in the home. The high proportion of homeowners is likely to further enhance the family's desire to keep the disabled member out of an institution, and, in the future, wherever possible, results will be disaggregated by homeownership.

TABLE 5. Average Interest and Dividend Income by Income and Family Characteristics
(1976 data)
Family
Characteristics
Income Class
Up to $5,000 $5,000 - 10,000 $10,000 - 15,000 $15,000 or above
HEAD AGED 65-74
Single Person Household $278 $1,515 $3,636 $9,317
Two Person Household 235 866 1,907 6,783
HEAD AGED 75 OR ABOVE
Single Person Household 317 2,227 4,635 12,791
Two Person Household 255 1,043 3,286 10,094
SOURCE: Survey of Income and Education.

Dividend and interest income is presented in Table 5. The amounts are indicative of asset holdings.10 The averages rise dramatically across income class, becoming a substantial share of the income of those in the upper brackets. Single-person households and families headed by someone over 75 have the highest average property income in each income class. For these people, Social Security, pensions and earnings are all less, on average than for younger couples. Consequently, such individuals must primarily rely on past savings to place them in the higher income brackets. The "old" elderly with incomes above $10,000 thus have substantive assets on which to draw. Any calculation of the dissaving of assets based on life expectancy will also raise the well-being of the over 75 age group relative to those aged 65 to 74. Thus, a table incorporating the annuity value of these assets would show even greater disparity between age groups.

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