Perceived income adequacy among older adults in 12 countries: findings from the survey of health, ageing, and retirement in Europe

Abstract

Purpose: To validate a survey research measure of subjective income, as measured by perceived income adequacy, in an international context.

Design and methods: The study population comprised persons aged 50 years and older in 12 countries from the Survey of Health, Ageing and Retirement in Europe (n = 28,939). Perceived difficulty in making ends meet was regressed on sociodemographic variables, economic indicators, health status measures, and expectations regarding one's financial future. Country differences were also controlled.

Results: The findings confirm a multidimensional explanation of perceived income adequacy but also point to the primacy of objective economic indicators in predicting household financial distress. Respondents aged 80 years and older report less financial difficulty. Poor health status and pessimistic financial expectations also predict greater household financial distress but to a lesser degree.

Implications: Self-rated economic status is a robust indicator of financial capacity in older age and can be used by practitioners to gain meaningful information. However, practitioners should keep in mind that the oldest-old may underestimate financial difficulties.

Figure 1.

Predictors of financial distress by age groups^a: unstandardized logged odds coefficients (B). Note: ^aAdditional variables in the analyses (but not shown in the figure) included country, medium education, employment status, medium wealth, and medium income. Nagelkerke pseudo-R²: age 50–59 years, .36; age 60–69 years, .38; age 70–79 years, .38; age 80+ years, .29; p < .01.