In the interview portion of the Consumer Expenditure Survey, the size of the CU decreased as the age of the CU increased, as shown in the chart below. The average number of persons in a CU , by age of the unit, was 2. Per capita expenditures. Expenditures of CU s divided by the size of the CU. Total income. The sum of all income sources before taxes in , including the value of food stamps.
Earned income. Income from wages and salaries or self-employment in , including income from businesses and farms. The sum of all housing expenditures in , including the expenses associated with renting or owning a home such as rent, mortgage interest, property taxes, maintenance, utilities, furnishings, renters' or homeowners' insurance, home appliances, cleaning supplies, textiles, and luggage. It does not include payments toward mortgage principal, which are considered by most economists to be part of household savings rather than expenditures.
Housing tenure refers to the CU 's principal place of residence during the survey. The sum of all food expenditures in , including expenditures made at grocery stores and restaurants. Health care. The sum of all out-of-pocket health care expenditures in , including public and private health insurance, doctor visits, eye and dental care and aids, hospital services, lab tests, and prescription drugs.
The sum of all transportation expenditures in , including the purchase of new and used cars and trucks; insurance; gas and motor oil; finance charges; maintenance and repairs; licenses; rentals; other charges; and fares for travel by airplane, bus, train, and taxi.
The sum of all apparel expenditures in , including clothing, footwear, laundry, sewing, watches, jewelry, and storage. The sum of all entertainment expenditures in , including club fees, sport fees, theater tickets, televisions, stereos, pet expenses, toys, hobbies, campers, boats, and sporting equipment. The sum of all other expenditures in , including those for alcohol, personal care, reading, education, tobacco, miscellaneous items, cash contributions to persons or organizations outside the CU , personal insurance, pension contributions, and Social Security payroll taxes.
Travel is a combination of the above categories presented as the sum of all expenditures on out-of-town trips in , including those for food; alcohol; lodging; gas; rental of autos, trucks, motorcycles, boats, campers, and other vehicles; parking; tolls; fares for travel by airplane, bus, train, and taxi; and recreation and entertainment.
Data in this report reflect expenditures in The Trends section also includes comparative data on expenditures in and Data are from the interview portion of the Consumer Expenditure Survey, unless otherwise noted. Some charts contain data from an integration of the diary and the interview portions of the Consumer Expenditure Survey.
Some expenditure items are measured in either the interview survey or the diary survey; others are measured in both the interview survey and the diary survey. In the latter cases, the data source used for a given item is the survey that yields the smallest standard error for that item. Items are aggregated into summary categories that may include data from both the interview and diary portions. Charts variously show mean, median, and percentile values. Because means can be influenced by high-spending outliers, mean expenditure data can be highly skewed.
In those cases, median and percentile figures provide a clearer picture of the distribution of expenditures. However, the interview and diary portions cannot be combined to calculate medians and percentiles because the two surveys have different questionnaires and samples. The estimates in this chartbook, which are based on the Consumer Expenditure Survey Public-Use File, may vary from those published by the Bureau of Labor Statistics because some Public-Use data are adjusted to prevent the disclosure of respondents' personal information.
Income figures refer to income before taxes. Those figures include some noncash benefits, such as the value of food stamps. Expenditures include Social Security payroll taxes and property taxes on owned dwellings and vacation homes.
Income quartiles for CU s aged 65 or older are four groups of roughly equal size as determined by their income level, as follows:. The Consumer Expenditure Survey was the first in which the Bureau of Labor Statistics imputed income for units that did not report their amounts and sources of income. In the previous edition of this chartbook, which was based on the Consumer Expenditure Survey, CU s that did not have complete income information were excluded from the analysis.
This edition includes CU s that reported their income as well as those for which the Bureau of Labor Statistics imputed income. Charts that show data by age group also show aggregate data for CU s aged 65 or older in a shaded bar in or adjacent to the chart. In charts showing percentage distributions, totals do not necessarily equal the sum of rounded components. Some charts present data as box plots. The upper and lower edges of the box plots represent the values at the 75 th and 25 th percentiles.
The box therefore presents the interquartile range, or the middle 50 percent of the data, to indicate the variability of the values. Within the box, a third horizontal line indicates the median 50 th percentile value. A sample box plot appears below.
Annual expenditure amounts for all CU s aged 65 or older ranged widely. Median and mean values are not shown. Per capita expenditures account for differences in the number of persons in a CU.
Although the difference in spending between the 25 th and 75 th expenditure percentiles was greater in absolute terms in the highest income quartile than in the lowest income quartile, in relative terms the patterns were quite similar.
In all four income quartiles, expenditures at the 75 th percentile were about 1. Almost three-quarters 74 percent of CU s aged 65 or older had no earned income. Per capita expenditures exhibited similar patterns. Housing was the largest component of expenditures 35 percent for CU s aged 65 or older.
Other large components included transportation 14 percent , out-of-pocket health care 13 percent , and food 12 percent. Smaller components included entertainment 5 percent and apparel 3 percent. Other types of expenditures, including those for alcohol, personal care, reading, education, tobacco, miscellaneous items, cash contributions to persons or organizations outside the CU , personal insurance, pension contributions, and Social Security payroll taxes, accounted for 17 percent.
Social Security payroll taxes and pension contributions were small components of total expenditures 3 percent and 1 percent, respectively. Per capita expenditures were similarly distributed. CU s aged 65 or older spent similar shares on the various expenditure components regardless of whether they had earned income. Housing was the largest expenditure for both groups 34 percent for those with earned income and 36 percent for those with no earned income.
Expenditures for out-of-pocket health care, food, and transportation ranged from 11 percent to 15 percent. Entertainment and apparel were smaller components, ranging from 2 percent to 5 percent. Other expenditures accounted for 22 percent of total expenditures for those with earned income including 7 percent for Social Security payroll taxes and 2 percent for pension contributions and 15 percent of total expenditures for those with no earned income CU s with no earned income would not incur Social Security payroll taxes or pension contributions.
The proportion of expenditures allocated for housing, food, and out-of-pocket health care was 27 percent higher for CU s in the lowest income quartile than for those in the highest income quartile. CU s aged 65 or older in the lowest income quartile spent 43 percent of their total expenditures on housing compared with 33 percent for those in the highest income quartile.
Food made up 14 percent of expenditures for CU s in the lowest income quartile and 12 percent for those in the highest income quartile. Out-of-pocket spending for health care accounted for 14 percent of expenditures in the lowest income quartile, compared with 11 percent in the highest quartile. Both income groups allocated similar percentages to entertainment and apparel. CU s in the highest income quartile allocated twice the proportion of expenditures to the "other" category as did CU s in the lowest income quartile 22 percent compared with 11 percent.
Expenditure amounts varied by age. This section of the chartbook examines three age groups: 55—64, 65—74, and 75 or older. Per capita expenditures followed the same pattern.
The distribution of spending among expenditure components varied slightly by age, with the largest share going to housing for all age groups. CU s aged 75 or older allocated 15 percent of expenditures to out-of-pocket health care, almost twice the 8 percent share for those aged 55— Compared with CU s aged 55—64 , those aged 75 or older allocated less of their expenditures to transportation 13 percent versus 16 percent and to other expenditures 17 percent versus 23 percent.
The shares of expenditures allocated to food and housing were generally similar for all three age groups ranging from 12 percent to 13 percent and from 33 percent to 36 percent, respectively , and only small proportions were allocated to entertainment from 4 percent to 6 percent and apparel from 2 percent to 3 percent. Housing was the largest component of expenditures for all three age groups. The median share of expenditures allocated to housing was about 37 percent for all three age groups.
About 80 percent of CU s in all three age groups owned a home, and the proportion of CU s that owned a home without a mortgage increased with age. Homeowners aged 55—64 were the least likely to own without a mortgage about 35 percent. Among homeowners aged 65—74 , those with no mortgage nearly doubled those with a mortgage 54 percent compared with 29 percent , and homeowners aged 75 or older were approximately 5 times more likely not to have a mortgage than to have one 68 percent compared with 13 percent.
The mean percentage of total expenditures allocated to housing was lowest for homeowners without a mortgage between 28 percent and 32 percent and highest for CU s who rent 40 percent to 49 percent. The median percentage of total expenditures spent on food was about 16 percent for CU s aged 55—64 and 17 percent for those in the two older age groups. Including all age groups, the 25 th and 75 th percentile values ranged from 11 percent to 24 percent, respectively.
Older age groups allocated a larger share of food expenditures to food prepared and eaten at home than did younger age groups. CU s aged 75 or older were more likely to allocate 95 percent or more of their food expenditures to food prepared and eaten at home than were CU s aged 55—64 36 percent compared with 22 percent.
The average percentage of food expenditures allocated to food prepared and eaten at home was 61 percent for CU s aged 55—64 , 63 percent for CU s aged 65—74 , and 68 percent for CU s aged 75 or older not shown. Median out-of-pocket health care expenditures ranged from 5 percent of total expenditures for CU s aged 55—64 to 14 percent for those aged 75 or older. From the 25 th to the 75 th percentiles, the share of total expenditures allocated to health care ranged from 1 percent to 11 percent for CU s aged 55—64 and from 8 percent to 23 percent for CU s aged 75 or older.
The Consumer Expenditure Survey covers the noninstitutionalized population and therefore omits nursing home residents and their expenditures. Health insurance premiums accounted for the largest share of out-of-pocket health care spending for all age groups from 55 percent to 64 percent. Medical services were the second largest component of health care expenditures for CU s aged 55—64 , and drugs were the second largest component for CU s aged 75 or older.
Medical supplies accounted for only about 3 percent to 4 percent of health care expenditures for all age groups. Almost all transportation expenditures were for the purchase and maintenance of vehicles. The purchase of new and used cars and trucks accounted for 32 percent of transportation expenditures for CU s aged 55—64 and 75 or older, and for 27 percent of transportation costs for those aged 65— Other vehicle expenditures made up 61 percent of transportation spending for CU s aged 55—64 and 75 or older, and 65 percent of transportation costs for those aged 65— Across all age groups, only 7 percent to 8 percent of transportation expenditures went to public transportation.
Other expenditures include such items as alcohol, personal care, reading, education, tobacco, miscellaneous items, cash contributions to persons or organizations outside the CU , personal insurance, pension contributions, and Social Security payroll taxes.
As a percentage of total expenditures, median expenditures in the "other" category were 12 percent among CU s aged 55—64 , 7 percent among CU s aged 65—74 , and 6 percent among CU s aged 75 or older.
Mean other-category expenditures exceed the medians by substantial margins mainly because of very high cash contributions to individuals and organizations made by a relatively small percentage of the aged population. The allocation of other expenditures differs among age groups. Cash contributions were the largest component of other expenditures for CU s aged 65—74 and 75 or older 31 percent and 44 percent, respectively.
Social Security payroll taxes were the largest component of other expenditures for CU s aged 55—64 36 percent. No more than 31 percent of CU s in the three age groups shown had travel-related expenditures, and the percentage that had such expenditures decreased with age. Travel comprises elements from the housing, food, transportation, and entertainment expenditure categories that are spent on out-of-town trips. This category includes food; alcohol; lodging; gas; rental of autos, trucks, motorcycles, boats, campers, and other vehicles; parking; tolls; fares for travel by airplane, bus, train, and taxi; and recreation and entertainment expenses on out-of-town trips.
About 31 percent of CU s aged 55—64 , 30 percent of CU s aged 65—74 , and 17 percent of CU s aged 75 or older had some expenditures for travel. Among CU s with travel expenditures, the median share of total expenditures allocated to travel was about 4 percent to 5 percent across all age groups. The remainder of this edition shows expenditures in , , and for CU s aged 65 or older. The Consumer Expenditure Survey is a cross-sectional survey in which the sampled households change from year to year.
Therefore, the data presented in these charts are snapshots of all CU s aged 65 or older in those three years; that is, they do not represent the experience of the same group of households from year to year. If that was your only income, you might need to in order to qualify, but if you had other income, you might choose to exclude this pay to keep you within the income guidelines.
You can get an estimate of your credit by using the tax credit calculator. The calculator will guide you through the process and make sure you get the largest EITC and any other credits you are eligible for. The federal tax return does have a few restrictions regarding the EITC. Aggregate investment income is defined as having multiple investments business or other revenues that generate income.
Anything higher than that, the IRS would consider the tax filer as having other ways of supporting themselves and thus would not need the EITC. Other restrictions apply to the EIC, so it may be best to use tax software to file your taxes. This not only ensures you receive the most accurate earned income tax credit but also prevents errors from occurring. Some tax software will help you distinguish the appropriate credit to receive as well.
Depending upon your status, as a taxpayer, you are entitled to additional income tax benefits offered statewide as well. An Earned Income Tax Credit regulation to be aware of is falsifying information provided when filing for the earned income tax credit. Earned Income Tax Credit fraud has raised suspicion lately.
Unfortunately, the existing schemes make it hard for those truly in need of the credit. If a tax filer is caught falsifying information, a fine and other penalties would be imposed. There are, of course, many times where errors occur completing the Earned Income Tax Credit portion of the federal tax return.
If the credit claimed is found to be unjustified or claimed in error, the IRS has the power to lower any penalties. Contrary to popular belief, the IRS is human-operated and realizes human errors happen.
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