There is a new study out from money manager United Income regarding the recent wealth of American retirees. The study finds that while the country’s retirees may be trending both healthier and wealthier, it also found an interesting notion that retirees are not necessarily becoming wiser. A fairly large amount of retirees compared to their predecessors are spending substantial amounts of time in front of the television set in their golden years.
The firm analyzed data from sources, such as the Federal Reserve Board, the U.S. Bureau of Labor Statistics, the Census Bureau, the Internal Revenue Service, and the Centers for Disease Control, to examine how the lives of American retirees has changed.
According to the study, one of every six retirees in the U.S. is a millionaire (when the value of homes are included). The average wealth of this group has risen more than 100 percent since 1989, to $752,000, and the share of those who are millionaires has doubled. See the chart below for more:
As many as 62 percent of retirees were found to be enjoying life without any sort of physical or cognitive boundaries, according to United Income’s data. That is a large leap up from 49 percent in 1963, which was the first year that this data was recorded.
Newly Found Time = More TV for Retirees
Of course, with no longer having to work the daily grind that leaves a lot more free time. “The largest change in activity is a near doubling of the amount of time retirees watch TV over the past 40 years,” notes the report. (The latest data is for 2012.) Now, the average retired 60-year-old watches television almost three hours every day. These increases were found to be the largest in high-income, highly educated households, which experienced a large rise of 78 percent in time spent on the couch since 1975, compared to 43 percent for lower-income households.
It was also found that retirees may not be learning much from their viewing habits, according to the report. It referred back to 2016 Pew Research Center data that showed a staggering more than 55 percent of households older than age 65 watch cable news programs, and also notes that “one multi-country study found that public broadcast news (such as PBS) increased political knowledge, while cable news actually reduced knowledge that people have about actual events.”
Retiree Income Inequality Remains Unchanged
Also, income inequality has remained practically unchanged among retirees since 1989. However, the outlook changed drastically when the financial assets of a household were put into play. The ongoing rises in the stock market brought about a 42 percent rise in wealth inequality among older Americans. “People have held incomes and spending constant over time,” notes Matt Fellowes, United Income’s founder and chief executive officer. “The wealthiest retirees are wealthier but are not spending more, relative to previous generations.” As a result, Fellowes feels that large amounts of Americans have become unnecessarily frugal in their spending and are leading “overly contained” lives as a result.
Almost in lockstep with the above, the gap between the wealthy and the ultra-wealthy has grown. A median millionaire’s wealth increased by about 12 percent from 1989 to 2016, while the median millionaire’s equity position expanded greatly from 27 percent of financial accounts to 55 percent. Meanwhile, the wealth of the top 1 percent of millionaires, grew more than double, from $14.9 million to $31.3 million, in 2016 dollars, as their equity positions jumped from 30 percent to 69 percent, notes the report.
“It’s clear that the dividends from being an investor are paying off for retirees fortunate enough to have savings and investments,” said Fellowes. “What’s discouraging is that those who are not saving or investing are just getting left progressively farther and farther behind as each successive generation enters retirement.”