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 Front Cover
 Table of Contents
 Acknowledgement
 Introduction
 Pre-retirement family incomes
 Economic outlook for retiremen...
 Factors affecting retirement...
 Elderly rural persons in Flori...
 Literature cited














Group Title: Bulletin - University of Florida Institute of Food and Agricultural Sciences ; 729
Title: Retirement income expectations of rural southerners
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 Material Information
Title: Retirement income expectations of rural southerners
Series Title: Bulletin - University of Florida Institute of Food and Agricultural Sciences ; 729
Physical Description: Book
Language: English
Creator: Alleger, Daniel E.
Publisher: Agricultural Experiment Stations, Institute of Food and Agricultural Sciences, University of Florida,
Publication Date: 1969
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Spatial Coverage: North America -- United States -- Florida
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Bibliographic ID: UF00049912
Volume ID: VID00001
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Rights Management: All rights reserved by the source institution and holding location.

Table of Contents
    Front Cover
        Page 1
    Table of Contents
        Page 2
    Acknowledgement
        Page 2
    Introduction
        Page 3
        Page 4
        Page 5
        Page 6
        Page 7
    Pre-retirement family incomes
        Page 8
        Page 9
    Economic outlook for retirement
        Page 10
        Page 11
        Page 12
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
    Factors affecting retirement projections
        Page 18
        Page 19
        Page 20
    Elderly rural persons in Florida
        Page 21
        Page 22
        Page 23
        Page 24
        Page 25
    Literature cited
        Page 26
Full Text
C( I BULLETIN 729
J^b,7^ '7


Retirement Income Expectations

Of Rural Southerners

A Survey in Florida and in
The Rural South


DANIEL E. ALLEGER


Agricultural Experiment Stations
Institute of Food and Agricultural Sciences
J..W. Sites, Dean for Research
University of Florida, Gainesville


APRIL 1969










CONTENTS


Introduction ............ .....- ..

Eligibility of Respondents ..-..............

Sampling Procedure ............... ...... ....

Scope of Data Examined ......--.---.. -

Data Examined ......-..... ---....... ....

Pre-Retirement Family Incomes ...............-..

Family Incomes ............--....-..........

Sources of Incomes .....................

Family Resources ...................... ..


Economic Outlook for Retirement ...............

Anticipated Retirement Incomes .............

Anticipated Retirement Assets ...........

Living Costs Anticipated at Age 65 ..........

Factors Affecting Retirement Projections ......

Occupations ..................

Family Structure .....................-... .......

Age and Education ........................-....-

Health Ratings .............-.......


Incomes and Assets .--.............


Elderly Rural Persons in Florida

Concluding Observations ----......

Summary .............................

Social Implications ......-..........

Literature Cited ..........-.............


-.....- .....--... --..... -... .- ..-.........-.. 20


- -.. -.- ....- .-- .- .-.... --- .. ... ......... 21

...--...- .. ....---- ..- ..--......--....-... 23

-.... .... ........................... .. 24

...............- .. ....... ..... .............-. 24

. .. .. ..... .. 26


ACKNOWLEDGMENTS


This report is one of several being written for publication by the
various technical committee members of the S-56 Regional Project, Eco-
nomic Provisions for Old Age Made by Rural Families in the South.
Appreciation is hereby extended to all members of the S-56 Committee
and others for their many helpful reviews and suggestions; to Professor
James C. Fortson, the University of Georgia, and to Dr. Max R. Langham
and Dr. Frank G. Martin, the University of Florida, for advisory and
statistical assistance, and to Mrs. J. M. (Lorena) Wing, a former State
welfare worker, for securing interview records.


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- - --


.......... 3
3

--------..-- 3

-.....--.. 4

--........ 5

..--...-------- 5

----------- 8

8

8

9
------- --- 13
....--...- 8



......... 91
......... 10


........... 13


.........-- 1

........... 19

- --------- 1 9

........ 19

.......... 19

........ 20


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CONTENTS


Introduction ............ .....- ..

Eligibility of Respondents ..-..............

Sampling Procedure ............... ...... ....

Scope of Data Examined ......--.---.. -

Data Examined ......-..... ---....... ....

Pre-Retirement Family Incomes ...............-..

Family Incomes ............--....-..........

Sources of Incomes .....................

Family Resources ...................... ..


Economic Outlook for Retirement ...............

Anticipated Retirement Incomes .............

Anticipated Retirement Assets ...........

Living Costs Anticipated at Age 65 ..........

Factors Affecting Retirement Projections ......

Occupations ..................

Family Structure .....................-... .......

Age and Education ........................-....-

Health Ratings .............-.......


Incomes and Assets .--.............


Elderly Rural Persons in Florida

Concluding Observations ----......

Summary .............................

Social Implications ......-..........

Literature Cited ..........-.............


-.....- .....--... --..... -... .- ..-.........-.. 20


- -.. -.- ....- .-- .- .-.... --- .. ... ......... 21

...--...- .. ....---- ..- ..--......--....-... 23

-.... .... ........................... .. 24

...............- .. ....... ..... .............-. 24

. .. .. ..... .. 26


ACKNOWLEDGMENTS


This report is one of several being written for publication by the
various technical committee members of the S-56 Regional Project, Eco-
nomic Provisions for Old Age Made by Rural Families in the South.
Appreciation is hereby extended to all members of the S-56 Committee
and others for their many helpful reviews and suggestions; to Professor
James C. Fortson, the University of Georgia, and to Dr. Max R. Langham
and Dr. Frank G. Martin, the University of Florida, for advisory and
statistical assistance, and to Mrs. J. M. (Lorena) Wing, a former State
welfare worker, for securing interview records.


...................

------- I ..........

---------- I -------


- - --


.......... 3
3

--------..-- 3

-.....--.. 4

--........ 5

..--...-------- 5

----------- 8

8

8

9
------- --- 13
....--...- 8



......... 91
......... 10


........... 13


.........-- 1

........... 19

- --------- 1 9

........ 19

.......... 19

........ 20


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- -------- ----------- ------







RETIREMENT INCOME EXPECTATIONS OF
RURAL SOUTHERNERS

A Survey in Florida and in the Rural South

Daniel E. Alleger1

INTRODUCTION
The expectation of an eventual and relatively secure retire-
ment is now recognized as a social right by nearly all segments
of American society. In the "old days" providing for retire-
ment was largely a personal matter, but today the economic
activities of life are so strongly oriented toward a money
economy that the income aspects of retirement assume a much
greater significance than ever before.
Today both lay populations and public officials are constantly
involved with the many problems concerning the economic self-
sufficiency of persons aged 65 and over. Some of the queries
that these problems evoke are answered by a cooperative re-
search study which was activated in 1963 by the Agricultural
Experiment Stations of Alabama, Florida, Georgia, Tennessee,
and Texas. This study became known as the Southern Regional
S-56 Project, the source of data for this report. The specific
objectives of the study were:
1. To ascertain the economic and social goals and the pro-
visions made for older age by rural families, and
2. To analyze the specific interrelationships of present eco-
nomic and social conditions, goals and provisions for
older age.

Eligibility of Respondents
The families included in this study were randomly drawn
from rural populations in 32 counties of the five cooperating
states. They lived in counties in which more than half the
population was rural and was not part of a standard metropol-
itan area, as defined by the 1960 U.S. Census. Family eligibility
for inclusion in the study required: any family had to be a
husband-wife unit which was in existence for at least one year
at the time of the interview; the husband and wife were to be
living together in the same household; and the age of the
husband must range from 45 to 64 years, inclusive.
1Associate Agricultural Economist, Florida Agricultural Experiment
Station, University of Florida.
















I. Northwest Florida
2Northeast Florida
3.Central Florida


Figure 1.- Location of Florida counties included in the 5-56 Survey.

Sampling Procedure
Budgetary considerations limited the size of the sample.
Altogether, 4,697,856 rural inhabitants were enumerated in the
eligible counties in 1960 by the U.S. Census. The total popula-
tion was distributed proportionately as follows: Alabama, 19.3
per cent; Florida, 9.2 per cent; Georgia, 26.2 per cent; Tennessee,
28.5 per cent; and Texas, 16.8 per cent. The sample was appor-
tioned among the states in the same ratio as was the eligible
rural population. The number of records taken totaled 1,088
of which 100, or 9.2 per cent, were secured in Florida.
All states were further stratified into geographical and/or
topological areas. Strata boundaries were determined for all
intra-state areas. In Florida three such areas were delineated
(Figure 1). The number of records taken from each area was
in proportion to its eligible population to that of the State.
State highway maps, on which roads, houses, and other
features were identified, were used to delimit clusters of 20







homes each. These clusters were numbered from 1 to N, where N
represented the number of clusters in a county. Clusters were
numbered consecutively beginning in the northeast corner of
the county and thereafter in a serpentine manner from east to
west, and reverse.2 By the use of a table of random numbers,
the clusters to be included in the study were chosen. When
the desired number of records was obtained in any given county,
interviewing was discontinued.

Scope of Data Examined
Certain dependent variables, or characteristics which are
dependent on others, were initially assumed to be statistically
significant, that is, not due to chance.3 These were the cash
surrender value of life insurance policies, equities in family
dwellings, total equities, current investments, Old-Age, Survi-
vors, and Disability Insurance (OASDI) coverage, and pension
plans other than OASDI. Other associated but independent
(well-fixed) factors were race, age, education, occupations, place
of residence and health of the head of the family; also annual
family income, family structure, and leisure activities of family
heads.
It was hypothesized that if the magnitude of the dependent
variables were known, certain values, such as anticipated re-
tirement incomes and anticipated assets at age 65, could be
computed accurately. It was discovered, however, that this
assumption was not fully supported by the data. There were
elusive factors which could not be identified.

Data Examined
Both white and Negro families lived in most of the counties
studied. Approximately 86 per cent of all families were white
and 14 per cent Negro (Table 1). In analyzing the data secured,
various types of findings revealed that attributes affecting re-

2All counties of western Texas and of the subtropical areas of Florida
were excluded because they were regarded as not representative of the
region under study.
'Various descriptive statistics such as frequency distributions, means,
standard deviations, and variances, were applied to interpret the results
of this study.
The chi-square criterion was used to determine the degree of relation-
ship between discrete variables, and product-moment correlations to
ascertain the degree of association between continuous variables. By use
of these analytical methods both dependent and independent variables
were selected for use in least-squares and multiple-regression models.








Table 1.- Percentage distribution of 100 Florida respondents according
to selected characteristics, compared to 1,088 regional respondents, 1964.*
Social Florida Region
Characteristics White Negro White Negro

per cent
Residence: .............. All 100.0 100.0 100.0 100.0
Rural farm 23.7 20.8 49.0 44.8
Rural nonfarm 76.3 79.2 51.0 55.2
Age of husband:
45 to 49 years 31.6 16.7 28.1 26.0
50 to 54 years 26.3 33.3 25.2 28.6
55 to 59 years 15.8 25.0 25.2 26.0
60 to 64 years 26.3 20.8 21.2 18.2
Not ascertained ** 4.2 0.3 1.2
Family structure:
Couple only 42.1 16.7 42.5 19.5
Couple and children 48.7 62.5 48.2 60.4
All others 9.2 20.8 9.3 20.1
Number of families 76 24 934 154
Per cent 76.0 24.0 85.8 14.2
*All data herein and as subsequently presented, unless otherwise stated, refer to the
Southern regional families surveyed, the male heads of which ranged in age from 45 to
64 years.
**A dash, whenever used in a table, indicates that a given category.lacks a value
reference.

tirement expectations were differently combined for Negroes
than for whites. As a consequence, the retirement anticipations
of each race were separately examined.
In the region as a whole, the percentages of whites and
Negroes living on farms were relatively similar, but there was a
considerable difference in family structure between the two
races. Proportionately fewer Negro than white families con-
sisted of a couple only.4
The Florida populations approximated those of the region
in many respects. The age distributions of husbands between
the state and the region were somewhat comparable, as was
family structure. One difference noted was that relatively fewer
Florida families were farm families than was true for the region.
The percentage of whites in Florida who owned their homes
was the same as in the region for the 45 to 64 age category,
but Negro home ownership in Florida was somewhat higher
than in the region as a whole (Table 2). Ratios of employment

'The cooperating states have each devoted attention to one or more
aspects of the S-56 study; for example, Alabama to housing, Georgia to
generalized regional results, Tennessee to insurance, and Texas to leisure-
time activities. Additional reports, such as health-related factors, are
planned. One regional report entitled, Economic Provisions for Old Age
of Rural Families in Five Southern States, Southern Cooperative Series,
138, 1968 (Georgia AES, Athens).








between male heads in Florida and those of the region were alike
also. However, fewer males in Florida than in the region looked
forward to continuing their employment after age 65, and
around 90 per cent of the families both in the region and in
Florida anticipated the receipt of Social Security benefits begin-
ning with retirement.


Table 2.-Selected economic attributes of 100 Florida families, compared
to 1,088 Southern regional families, 1964.

Economic Attributes Florida Region
White Negro Both White Negro Both

per cent


Home tenure: ......... All
Owners
Renters
Employment for income,
1963:
Husbands
Wives
Anticipating employment
when husband reaches
age 65:
Husbands
Wives
Anticipating receipt of
Social Security, age 65:
Husband only
Husband and wife,
jointly
Husband and wife, each
Neither husband nor
wife
Not ascertained
Wife only

Family incomes, 1963:
Home owners
Renters
All families
Family assets, 1963:
Home owners
Renters


100.0
78.9
21.1


100.0
58.3
41.7


100.0
74.0
26.0


100.0
78.8
21.2


100.0
42.9
57.1


100.0
73.7
26.3


82.9 91.7 85.0 89.0 93.5 89.7
21.1 79.2 35.0 33.5 55.8 36.7



28.9 12.5 25.0 49.8 47.4 49.4
9.2 20.8 12.0 12.2 23.4 13.8


41.7 30.0
33.3 44.0
25.0 18.0

- 6.0
- 1.0
- 1.0


4,892
2,876
4,456

21,202
2,273


2,306
3,026
2,606

6,670
1,155


dollars

4,389 4,120
2,934 2,543
4,003 3,785

18,415 20,441
1,843 3,710


33.8

42.9
9.1

7.1
7.1



2,013
1,494
1,717

4,197
499


3,945
2,221
3,401

19,104
2,721


Number of families 76 24 100 934 154 1,088


Not more than half the husbands and wives of both races
actively pursued hobbies (4).5 Fewer yet were members of
clubs or other formal organizations, and less than half reported
annual travel for pleasure or to "see things." As they viewed
the future, most of the respondents indicated their hobby and
social interests would probably decline after retirement.

'See LITERATURE CITED for references placed in parentheses.







PRE-RETIREMENT FAMILY INCOMES
Retirement income expectations of Southern rural families
were found to be closely related to both amounts and sources
of income received in pre-retirement years, and to total assets
owned. While it was difficult for individuals to make long-range
estimates of family income, one major purpose of this study
was to project probable retirement outlooks from one to 20
years into the future, depending upon the age of the family
head. The projections proposed were not viewed as forecasts,
but rather as reliable tools for public-policy planning.

Family Incomes
In 1963, the median incomes of all families in this study
ranged from $1,952 for renters to $3,202 for owners.6 Average
family incomes of white respondents were 120% higher than
those of Negro respondents, or $3,785 to $1,717, respectively
(Table 3). More than three-fourths of the Negro families lived
at poverty levels (under $3,000 annually), as compared to just
over one-third of the whites (Figure 2). In gross numbers,
however, three white families were in poverty for every Negro
family so situated. In general, incomes of both white and Negro
families in Florida were substantially higher than average in-
comes of families in the region. In Florida, but not in the
region, the place of residence and income were also related
(Figure 3).

Sources of Incomes
Employment of family heads away from home for wages or
salaries contributed more to average family incomes than any
other source of income, or somewhat over 90 per cent of the
total (Tables 4 and 5). In about 33 per cent of the families the
husbands only were so employed, as compared to 12 per cent for
wives only, and to 20 per cent for both husbands and wives.
Collectively, 53.2 per cent of the husbands and 31.6 per cent of
the wives were gainfully employed for wages or salaries.
Although many sources of income contributed to family well-
being, few families received more than three sources of income.
'Average family incomes may be as much as 10 to 20 per cent below the
true values because of certain "no responses" which were treated as
zero values. A few families declined to provide specific data, such as
"interest received from cash savings." If all general items, such as
"income from wages or salaries" were answered, then the reported incomes
were included as totals in calculating sums and averages.







Table 3.-Major sources and amounts of family income, Florida families,
compared to 1,088 Southern regional families, 1963.

Families Reporting
White Negro
Sources of Income, 1963
Florida Region Florida Region

dollars
Wages and salaries 2,562 2,112 2,150 1,235
Farming 683 969 106 319
Self-employment 522 348 41
Unemployment compensation 4 91 -
All other 685 265 350 122
Total 4,456 3,785 2,606 1,717
Number reporting 74 934 24 154


White


Negro


$3,000to $6,0001
5,999 1 9,999


I $10,000
ond over


Figure 2. The percentage of white and Negro respondents falling in each
of four annual family income classes.

A typical secondary source of income was the employment of
wives. Quite frequently the employment of homemakers was
either seasonal or occasional, but the income-activities of the
husbands were more decisive in shaping anticipations for family
retirement than were those of wives.

Family Resources
Until the Social Security program began paying benefits to
older retirees, the traditional reliance for security in old age
was vested in savings. Today, more emphasis is placed upon













4,W Rural Farm
4,000- : -
3 0 Rural Nonfarm
3,000- -

2,ooo- :.....
I,000- : :


0-
Region Florida Region Florida
White Families Negro Families
Figure 3.--Annual farm and nonfarm family incomes reported for 1963,
the Southern region and Florida compared.

income for security during retirement than upon savings, but
thrift in the form of savings is still treasured. And to those
comparative few who can and do save in substantial amounts the
retirement horizon appears reassuring, but to others the out-
look for old age is less promising.
In the rural South, most families who accumulate savings
do so largely for long-range security and protection against
uncertainties. Resources reported were chiefly as investments
in home and/or farm, interest bearing deposits in banks, and
cash surrender values of life insurance policies. While the
average total resources reported per family approached $15,000
(Table 6), the range was from nearly zero to sums in six figures.
Within given categories, home owners saved more than non-
owners and white families more than Negro families (Table 7).
The median values of assets emphasize the disparity of re-
sources held by many families.

ECONOMIC OUTLOOK FOR RETIREMENT
When the male respondents in this survey reach age 65,
approximately 92 per cent of all Florida families and 90 per cent
of all families in the region expect to be eligible for Social
Security benefits (Table 2). In addition to Social Security
coverage earned by husbands about 15 per cent of the white








Table 4. Average family incomes for rural white home owners and
renters, Florida and the Southern region compared.

Florida S-56 Region
Sources of Income, 1963*
Owners Renters Both Owners Renters Both

dollars
Wages and salaries 2,673 2,159 2,562 2,204 1,676 2,092
Farming 846 94 683 1,088 496 962
Self-employment 621 162 522 415 78 344
Unemployment insurance 5 4 114 7 92
Property rentals 11 68 23 77 7 63
Social Security 140 161 144 75 85 78
Pensions 56 61 57
Contributions 340 267 24 63 32
Royalties 9 7
Interest on savings 9 7 8 8 2 5
Room rentals; boarders 30 23 8 6
Dividends 69 54 7 5
Welfare 48 105 60 5 57 16
Inheritances 3 2
Workmen's compensations 2 2
Unclassified 100 120 105 25 11 22
Average 4,892 2,876 4,455 4,120 2,543 3,785
Median value 4,800 2,980 4,150 3,202 1,952 **
Number of families 58 16 74 736 198 934

*Some families reported only one source of income; others reported two or more sources.
**Not computed.


Table 5. Average family incomes for rural Negro home owners and
renters, Florida and the region compared.

Florida S-56 Region
Sources of Income, 1963
Owners Renters Both Owners Renters Both
Wages and salaries 1,800 2,638 2,149 1,388 1,060 1,201
Farming 139 60 106 369 268 312
Self-employment 94 40
Social Security 218 141 186 58 46 51
Property rentals 35 15
Contributions 28 61 47
Pensions 76 45 16 5 10
Welfare 118 49 8 36 24
Interest on savings 1 -
Unclassified 73 69 71 16 18 17
Average, 1963 2,306 3,026 2,606 2,013 1,494 1,717
Median value 1,822 2,722 2,411 1,555 1,379 *
Number of families 14 10 24 66 88 154
*Not computed.

wives and 9 per cent of the Negro wives also had permanent
coverage in 1964 under the Social Security program, or were
accumulating it.
The vast majority of the pre-retirement families interviewed
was projected to fall into low-income categories when the male








Table 6.- Mean value of resources, 1,088 Southern rural families, 1964.

Economic Resources
Resource Item Mean Distribution
Value
($) (%)
Farm* 7,621 51.5
Home, nonfarm 2,062 13.9
Other realty 507 3.4
Inventories** 2,540 17.2
Savings 1,072 7.3
Business 681 4.6
Stocks, bonds, etc. 225 1.5
All other 90 .6
Total 14,798 100.0

*Farm residence and/or other farm land operated.
**Farm equipment, automobiles and trucks.
tCash savings and cash value of life insurance policies.

Table 7.-Economic resources of 934 Southern white and 154 Southern
Negro families, according to home tenure and race.

Owners Renters
Resource Item, 1964
White Negro White Negro

Real Property: .................... All $14,384 $3,144 $1,439 $ 83
Farm, not place of residence 6,250 747 1,207 9
Farm and place of residence 4,524 1,079. 4 -
Nonfarm home 2,924 1,209 50 25
Rental 257 53 112 46
Standing timber 231 53 4 -
Investment land 115 3 54 3
Vacation property 83 8
Non-Realty: ........................ All 6,057 1,053 2,271 416
Farm equipment 2,142 372 835 51
Automobiles and trucks 1,161 333 490 214
Business 997 30 27 -
Cash value, life insurance 923 243 506 129
Cash savings 417 33 255 6
Corporation stocks, bonds, etc. 310 85 1
All other 107 42 73 15
Total $20,441 $4,197 $3,710 $499
Median $ 9,586 $2,500 $ 767 $571
Number of families 736 66 198 88


heads eventually attain age 65. Of the families in the Florida
sample, nearly one-half anticipated the receipt of'$1,800 or less
annually during retirement and an additional fourth from above
$1,800 to $2,400. Only 15 per cent of all the male respondents
in Florida looked forward to annual retirement incomes of $3,000
or more.







Anticipated Retirement Incomes
Although family incomes drop after retirement, living costs
also tend to decline. The majority of respondents in this survey
either owned their homes free of mortgage indebtedness, or
expected to attain outright ownership before or by the time
they attained age 65.
Anticipated Social Security benefits totaled 60 per cent of all
retirement income expected by families in the region (Table 8).
In Florida it was 57 per cent. Floridians anticipated propor-
tionately more income from private and U. S. armed service
pensions than did the families in the region as a whole, or 17.2
and 6.5 per cent, respectively. In contrast, families in the region
expected larger shares of incomes from investments than did
Floridians, or 17.6 to 17.9 per cent. Income from all sources was
projected to average $165 monthly for white families and $82
for Negro families in the region, as compared to $211 for white
families and $138 for Negro families in Florida (Table 9).
Incomes expected at age 65 an assumed retirement age--
indicated that slightly more than 55 per cent of the white male
respondents and 67 per cent of the Negroes were basing their
hopes for financial support in retirement on Social Security
benefits. This may imply that less dependence will be placed
upon Old Age Assistance (OAA) in the years ahead than at
present, because of the easing of eligibility requirements for
coverage under the Social Security program, and the recent
increases in benefits provided for Social Security: recipients.
A trend away from dependence upon OAA assistance is indicated
by a comparison of the anticipated per cent change in all self-
participating retirement plans of both races of the Florida 45

Table 8. Anticipated monthly retirement income, 98 Florida families and
1,088 Southern regional families compared.

Anticipated Retirement Florida Region
Income by Source Dollars Per cent Dollars Per cent
Social Security 111 57.3 92 60.1
Pensions, various 21 10.9 6 3.9
Investments, savings 15 7.9 27 17.6
Employment 14 7.1 17 11.1
Armed services, U.S. 12 6.3 4 2.6
Railroad retirement 8 3.9 4 2.6
Old Age Assistance 5 2.9 1 0.7
All other 7 3.7 2 1.4
Totals 193 100.0 153 100.0
Number of families 98 1,088







Table 9. Percentage contributions of each of several sources of income
anticipated at age 65, Florida and the region compared.

Source of Income Florida Region
Anticipated White Negro White Negro
Social Security 55.2 67.3 58.8 79.9
Assets 8.9 3.1 18.6 0.6
Armed Service 6.6 5.1 2.7 1.0
Employment, husband 6.1 0.8 7.9 6.3
Employment, wife 0.7 7.6 3.5 3.1
State pensions 5.5 2.1 1.4 1.5
Railroad Retirement 4.7 2.5 1.5
U. S. Civil Service 4.1 1.0 -
Old Age Assistance 3.1 1.8 0.4 1.0
Company pensions 2.9 1.2 1.8 3.5
All other 2.2 11.0 1.4 1.6
Total 100.0 100.0 100.0 100.0
Income per month $211 $138 $165 $82
Number reporting 74 24 934 154


to 64 age group (Table 9) with the post retirement experience
of the Florida 65 and over age group (Table 13). Self-partici-
pating retirement income increases proportionately (36 per cent)
with decreasing (35 per cent) welfare assistance.
White families reported more probable sources of retirement
income than did Negro families, and they anticipated larger
incomes than Negro families.
Whatever the sources of family income, the great majority
of older rural people will continue throughout the foreseeable
future to have modest annual incomes, or less than $2,400, with
which to maintain personal independence. It also appears that
income disparity between white and Negro families cannot be
quickly or easily adjusted.
The slightly more favorable retirement income outlook in
Florida over that of the region (Table 8) may be attributed to
several factors. One, Alabama, Tennessee and Texas included
high proportions of low-income farmers in their samples,
whereas the respondents in Florida and Georgia were composed
largely of nonfarm people. In addition, nearly 50 per cent of the
respondents in Alabama and Tennessee were also members of
low-income families, or families with less than $3,000 in annual
income, as against 37 per cent for Florida. The projected month-
ly retirement incomes for the region are $179 and $112 for white
home owners and renters, respectively, and $90 and $75 for
Negro owners and renters (Table 10).








Table 10.- Percentage distribution of anticipated monthly retirement in-
come per family by source in the Southern region, according to home tenure
and race.
Sources of Income Anticipated Owners Renters
at Age 65 White Negro White Negro
per cent
Social Security 55.9 82.2 73.2 78.7
Investments,
husbands and wives 21.2 1.1 3.6 -
Employment, husband 7.8 3.4 7.1 10.6
Employment, wife 3.9 1.8 5.3
Railroad Retirement 2.8 2.2 0.9 -
Armed Services 2.8 3.4 2.7 -
Pensions 1.7 4.5 -
State, various 1.7 3.3 -
U. S. Civil Service 1.1 0.9 -
Contributions 0.6 0.9 -
Old Age Assistance 2.7 2.7
All others 0.5 4.4 1.7 2.7
Total 100.0 100.0 100.0 100.0
Average monthly income $179 $90 $112 $75
Number of families 736 66 198 88


Anticipated Retirement Assets
More than half of all the assets anticipated at age 65 by
both white and Negro home owners were projected to be in-
vestments in homes and land. Among non-realty items, cash
saved through investment in insurance was of major importance
(Table 11).
In the southern rural counties surveyed, payment of life
insurance premiums was the usual form of voluntary savings,
especially for renters. Among low-income people industrial
policies predominated, premiums for which were usually paid
on a weekly or monthly basis. Policyholders with relatively
substantial incomes purchased ordinary insurance, which
policies commonly have face values of $1,000 or over, and with
premiums payable annually.7 The cash surrender values shown
in Table 11 are projections based on expected values when the
husbands reach 65.8 In practice, however, industrial policies are

'Premiums for ordinary policies were also paid semi-annually, quarterly
or monthly, with rates being slightly higher than on an annual basis.
8A method for projecting cash values for industrial policies was
provided by the Metropolitan Life Insurance Company. Cash values
for ordinary policies were average cash surrender values as calculated
from both participating and non-participating policies of 16 large and
small companies, and according to type of coverage, age of the insured
at issue date of policy, and the age of the policy at date of interview.







frequently dropped by owners to meet family emergencies or to
acquire new material possessions.
In terms of subsidiary income to be derived from assets
anticipated at age 65, home owners had a considerable advantage
over renters. White home owners expected to accumulate, on
an average, three times the amount of assets anticipated by
white renters. For Negroes, owners had double the advantage
of renters, but this advantage was small in total money value
(Table 11). Projections show that there was a consistent increase
in the amount of monthly retirement income expected at age 65
as the quantities of resources owned increased (pages 21-23).
These findings imply that future retirement situations are re-
lated to the employment, family incomes, and accumulated
assets of the male breadwinners.

Table I1. Values of specific asset items anticipated by Southern rural
owner and renter families when husband attains age 65.

Owners Renters
Resource Item, 1964
White Negro White Negro

dollars
Real Property: ................... All 9,340 1,430 985 50
Farm, not place of residence 4,225 284 841 4
Farm and place of residence 2,736 617 -
Nonfarm home 1,949 498 -
Rental 172 31 90 46
Standing timber 132 -
Investment land 83 45 -
Vacation property 43 9 -
Non-Realty: -....................... All 3,074 1,200 2,206 1,190
Cash value, life insurance 1,644 609 902 307
Business 625 30 21 -
Farm equipment 327 81 338 21
Cash savings 198 333 814 795
Corporation stocks, bonds, etc 154 78 -
Automobiles and trucks 101 92 53 67
All other 25 55 -
Total 12,414 2,630 3,191 1,240
Median 1,680 868 707 611
Number of families 736 66 198 88


Living Costs Anticipated at Age 65
Personal wants generally decline in old age, and as the elderly
become less mobile they tend to resign themselves to existing
living situations and devote less and less attention to home
upkeep and repair. Major home improvements are often viewed







as burdensome but a mortgage-free home, however modest and
inadequate, offers security and a means of survival on a limited
retirement income.
Table 12 exhibits normal living costs anticipated at age 65
for both white and Negro families in the rural South. Costs
appear to be low, averaging around $45 and $21 per month for
white and Negro families, respectively. These costs represent
about 25 per cent of anticipated retirement incomes, which were
projected to be $165 for white families and $82 for Negro
families (page 13).

Table 12 -Selected mean annual family expenditures anticipated during
retirement, 934 rural white and 154 Negro families, 1964.

White Negro
Cost-of-Living Item
Dollars Per cent Dollars Per cent
Utilities 224 41.2 129 51.6
Home upkeep 118 21.7 24 9.6
Taxes 35 6.4 8 3.2
Property insurance* 28 5.1 9 3.6
Yard care 9 1.7 1 0.4
Personal insurance** 46 8.5 33 13.2
Hobbies and clubs 37 6.8 10 4.0
Pleasure travel 30 5.5 17 6.8
Credit payments 17 3.1 19 7.6
Totals 544 100.0 250 100.0
*Premiums on property, household possessions, and automobiles.
*Premiums on life, burial, hospital and medical insurance.

The average cost of utilities, usually electric power and
natural or liquid gas, surpasses all other item costs exhibited.
Normal living costs anticipated, excluding items which can vol-
untarily be discontinued, averaged $414 per year for white
families and $171 for Negro families. Insurance and credit
payments totaled $63 for white families and $52 for Negro
families, leaving $67 and $27 for whites and Negroes, respective-
ly for recreational and miscellaneous purposes. This mean the
average white family expects to spend little more than $5 per
month after retirement for reading material, hobbies, social par-
ticipation, pleasure travel, and personal uses, as against $2 per
month for the Negro family. Because of these income restric-
tions, many retirees read but little and participate in social
activities even less, yet some do pursue low-cost hobbies, es-
pecially fishing.
White families expect to have around $120 per month to
cover expenditures for food, clothing, transportation, personal
medical costs and miscellaneous items, and Negro families, $61.







From these data one may reasonably assume that retirement
for many rural Southerners will continue to be largely one of
relative economic deprivation, however improved their future
outlook may seem as a result of recent Federal social legislation.

FACTORS AFFECTING RETIREMENT PROJECTIONS
Various analyses of the S-56 data revealed how the attributes
affecting incomes of white and Negro families tended to cluster
differentially and to yield drastically unlike retirement expecta-
tions.9 For example, costs of home upkeep, medical care, life
insurance, and leisure activities, as well as net equities owned
by householders, differed quite generally from state to state and
according to family income levels, but more so for white than
for Negro families (2).
Lack of homogeneity in the spending and saving habits of
families was apparent in some aspects of living, yet a consider-
able degree of similarity prevailed. To illustrate, the average
cost of home upkeep deviated according to state of residence and
family income for both whites and Negroes, but the occupations
of the Negro male heads were also determining factors. For
white families, costs of medical care varied by state of residence,
the health of the husband, and family structure; for Negro
families only in relation to family incomes. In total assets
accumulated, significant differences were noted for both white
and Negro families according to state of residence and family
income. Among whites, but not among Negroes, amounts of
total assets owned also differed according to farm or nonfarm
residence, home tenure, and occupation of the husband.
Predictive attributes were difficult to isolate, yet six were
identified as being of significance for white families, and three
for Negro families, only two of which were common to both
whites and Negroes.10 In general, more favorable retirement

'Least-squares analyses, which contained five covariates, were run at
the University of Georgia Computing Center. The covariates were (1)
number in family, (2) formal education of husband, (3) formal education
of wife, (4) age of husband, and (5) age of wife. It was assumed that,
for a given race, each covariate had an identical effect on the dependent
variables in all states. In addition, sums and averages were calculated
and linear multiple regression analyses completed at the University of
Florida Computing Center.
'OPredictive variables were identified by linear multiple regression
analyses. Regression equations were estimated in a step-wise manner. The
criterion used for the inclusion of a term in the model developed was based
on the reduction in the residual mean square. No term was added to it
unless the reduction was significant at the 90 per cent (90%) level of







outlooks prevailed for white respondents who were not farmers,
whose families consisted of a couple only, who had better than
average education, and whose family incomes and assets were
superior. For Negroes, a family of two, the good health of the
husband, and family incomes were important.

Occupations
The nature of one's work and therefore one's income is
usually related to his education, and a farmer generally antici-
pates a low retirement income, whatever his education. Monthly
incomes of farmers are projected to average $12 per month lower
than nonfarmers. Another observation is that white-collar
workers anticipate larger monthly retirement incomes ($220 to
$350) than blue-collar workers ($170 to $190), and that the
average anticipated retirement income of either of these cate-
gories will be higher than those received by persons employed
in unskilled ($135) and farm occupations ($110 to $120 for
farmers and farm workers).

Family Structure
During his working life the average rural white male as-
sumes a lesser family support burden than his Negro counterpart
(2). This differential family situation was very significant in
shaping retirement expectations for both whites and Negroes.
On an average, a white family of husband and wife only antici-
pates a retirement income of $7.50 per month more than a
family of larger size, but the difference for the Negroes exceeds
$16 per month.

Age and Education
The age and education of male heads of families are inversely
related, but incomes and education are directly associated (1).
As a result, it is to be expected that older persons will have
lower incomes both while employed and later during retirement.
This relationship has been frequently established, and was
again revealed in this survey (Figure 4). Anticipated retire-
ment income drops progressively, or by $1.34 per year, between
confidence.
The per cent reduction in the observed variation in the equation used
was 14.1% and 13.0% for white and Negro respondents, respectively.
Thus, the majority of the variation observed in the projected retirement
incomes should be attributed to causes other than the independent vari-
ables analyzed.









"'.... i Average
Age Average
175- / 175- Education

165-------- 165- --- -

e155 Inc
155- Average 155-Income Straight Line
Income I Relationship
Straight Line
145- onsh 145-

0 0
45 50 55 60 65 0 4 8 12 16
Age Education
Figure 4. For white respondents, anticipated retirement incomes drop
with increases in age and rise positively and directly with education.

45 and 64 years of age. This trend is associated with several
factors. Among these for the younger workers, as compared to
older workers, are higher incomes, longer anticipated coverage
under Social Security and higher levels of education. The income-
producing effect that education has on retirement income ex-
pectations emphasizes the direct association of limited education
with poverty, both for the gainfully employed workers and for
retirees.


Health Ratings

Self-health ratings of white respondents had no significant
influence on retirement expectations, but among Negroes those
in good health expected $14 per month more than those in poor
health. One reason for this difference in outlook may be that
Negroes consider income supplementation by employment as
essential, whereas prospective white retirees think of future
employment as avocational.


Incomes and Assets
Pre-retirement white farmers, professional, clerical and sales
respondents in 1964 all reported assets in excess of $20,000.
They were followed by managers ($18,678) and skilled workers
($10,944). On an average all other white families reported
assets which ranged by employment categories from about $6,200







to $8,700.11 The assets owned by Negroes had no predictive
significance, but were higher for personal service workers
($5,867) than for others (up to $2,600).

ELDERLY RURAL PERSONS IN FLORIDA
In order that the economic expectations of the respondents
in this study could be observed against case-study retirement
situations of the elderly, 80 records were secured in Florida in
1964 from male respondents aged 65 and over. Comparisons
showed that more than half the respondents, aged 45 to 64,
expected to be largely dependent upon Social Security when they
retire (Table 9), and that less than a third of the elderly were
actually receiving Social Security benefits when interviewed
(Table 13).12

Table 13.- Percentage distribution of monthly income received by elderly
white and Negro rural families, Florida.

Source of Income, 1963 .Percentage Distribution
Male Heads, 65 and Over White Negro
per cent
Social Security 32.2 30.0
Asset Income 18.4 7.8
Armed Services 12.1 10.6
Employment, husband 6.3 10.9
Employment, wife 4.2 6.7
State Pensions -
Railroad Retirement 3.3
U. S. Civil Service 6.0
Old Age Assistance 10.9 29.0
Company pensions 4.0
All other 2.6 5.0
Total 100.0 100.0
Income Per Month $208 $129
Number Reporting 61 16

The shift toward dependence upon Social Security for re-
tirement income is due largely to changes in ways of living,
employment, and actions of the Federal and state governments
that bear upon family support in old, age. The urbanized mode
of living today, the dependence upon money income for family

"Each $1,000 of total assets owned by white families yielded an
expected increase of 20 cents per month in anticipated retirement income.
"Twenty-two countries already provide more Social Security benefits
than the United States. See The War on Poverty as it Afects Older
Americans, Hearings, Special Committee on Aging, United States Senate,
89th Congress, June 1965, p. 130.







support, and the discontinuance of employment at age 65 all
introduce new dimensions into retirement living. When funds
are limited, skill in the management of family income may spell
the difference between comfortable living and privation (3).
In meeting the costs of retirement, elderly home owners in
Florida were generally more favorably situated than renters.
Owners reported the receipt of higher monthly retirement
incomes than did renters, or $208 to $115, respectively. On an
average, the elderly renter had but $42 to meet costs for food,
clothing and miscellaneous items after allowing for medical
costs, rent, life insurance, utilities and similar items, compared
to $128 for owners. These averages, although not comparable
to cost projections of pre-retirees ('Table 12), do indicate that
the amount of money spent by retirees for food and other neces-
sities is not too different from estimates (p. 25), Disparity in
family incomes between white and Negro families persists at
all ages but decreases late in life, based on the Florida survey
(Figure 5).


Annual
Income

5,000- White


4,00white and 40 ruralNegro Negro families, according o age of male head, Floida.


3,000 -


2,0 0 0 -.

1,000


l45-4950-54l55-59l60-6465-69l70- 7475-79 80an
over

Age of Male Family Heads


Figure 5.-Comparision of 1963 annual incomes received by 135 rural
white and 40 rural Negro families, according to age of male head, Florida.







Assets owned by white and Negro retirees, and by owners
and renters in retirement are as characteristically different
(Table 14) as for pre-retirement families (Table 2). Evidence
that total net assets and pre-retirement family incomes are
related and that this association continues into retirement was
supported by incomes received by Florida families in the re-
tirement- age brackets. For those whose net assets were $5,000
or less, their average retirement family income was $1,800,
of which $400 consisted of OAA payments. Those in the asset
category of $5,000 to $9,999 reported an annual family income
of $2,427, of which $342 was from OAA. Persons reporting the
ownership of $10,000 or more in assets received a $3,637 annual
income in 1963, none of which was derived from OAA monies.
The virture of thrift and/or ability to save thus appears to
have deferred monetary rewards (3).


Table 14. Selected economic attributes of 80
aged 65 and over, Florida, 1964.


rural families, male heads


Respondents
Economic Attributes
White Negro Both
per cent
Home tenure: ...................... All 100.0 100.0 100.0
Owners 81.0 70.6 78.8
Renters, other non-owners 19.0 29.4 21.2
Sources of family income, 1963:*
Retirement benefits and payments 96.8 94.1 96.2
Returns from assets 41.3 17.6 36.3-
Employment of wife 14.3 29.4 17.5
Employment of husband 9.5 5.9 8.7
All others 6.3 11.8 7.5
Family income, 1963: dollars
Home owners 2,682 1,782 2,493
Renters, other non-owners 1,480 1,138 1,379
Average, all families 2,445 1,550 2,212
Family assets, 1964:
Home owners 12,432 4,966 10,931
Renters, other non-owners 1,329 428 1,064
Average, all families 10,317 3,394 8,834
Number of families 63 17 80
*Some families reported more than one source of income. Thus, percentages do not
add to 100.

CONCLUDING OBSERVATIONS
The Southern Regional Project, S-56, upon which the fore-
going findings were based, was designed to ascertain among
other things, what economic provisions rural Southern families
were making for retirement, if any. In 1964, interview records







were secured from 1,088 rural Southern families randomly se-
lected from rural counties in Alabama, Florida, Georgia, Ten-
nessee, and Texas. The male heads of all these families ranged
from 45 to 64 years of age.

Summary
Over one third of the white families and about three-fourths
of the Negro families interviewed received annual incomes of
less than $3,000 in 1963, and which were derived largely from
wages and salaries. Over 90 per cent of all families anticipated
the receipt of Social Security benefits upon retirement. On an
average, white families were projected to receive $165 in
monthly income upon retirement, and Negro families, $82. In
Florida, the respective amounts were $211 and $138 for white
and Negro families.
The value of assets owned ranged from virtually nothing to
sums in six figures. The average for white home owners was
$20,441 and the median $9,586; for white renters the average
was $3,710 and the median $767. Assets owned by Negroes
averaged $4,197 for home owners and $499 for renters. The
respective medians were $2,500 and $571. The major assets
consisted of equities in nonfarm homes and in home and farm.
The accumulation of assets, or lack of them, was reflected in
retirement expectations. The anticipated contribution of assets
to-retirement approached 9 per cent of the total for whites, and
3 per cent for Negroes.
In 1964, family data were secured from 80 elderly respon-
dents to compare with an existing situation. The monthly in-
comes of home owners, aged 65 and over, averaged $208 and
those of renters, $115. These incomes nearly equalled those
anticipated for retirement by respondents yet to retire. The
money available or likely to be available for food, clothing,
recreation, and miscellaneous items in retirement was barely
sufficient to provide for basic needs, both as projected for the
45 to 65 age category of respondents and as found for those
65 and over.

Social Implications
The study clearly established that Southern rural families
generally do not make special provisions for retirement, and
normally cannot do so, except to the extent they achieve home
ownership and freedom from debts. Moreover, only those whose
assets are comparatively substantial ($10,000 and over) can







employ them for meaningful income-producing purposes. Because
this is the situation now existing, and since it is one that gives
promise of prolonged continuation, it is probable that rural
Southerners in general will keep on retiring for a considerable
number of years on modest and relatively fixed incomes.
What the amount of annual income should be to sustain
a Southern rural couple with self-respect in retirement is de-
batable. For the southern counties sampled, and under the con-
ditions that existed in 1964, the amount could hardly be less
than $1,800 to $2,000. Even at this income base, there would
be little money available for self-improvement, recreation, and
avocational travel. The existing situation is that possibly three-
fourths of the Southern rural families do not anticipate even
this amount of annual income during retirement, assuming that
the S-56 sample is representative.
Although minimum retirement benefit standards may vary
from time to time, depending upon economic and other situa-
tions, the position of rural Southerners is one of comparative
disadvantage as measured by regional and sectional per capital
OAA payments. Because of a combination of circumstances,
it is in rural counties that subsidiary private and public em-
ployment is difficult to obtain. Recently the United States Con-
gress recognized the need for "war on poverty" as it affects
older Americans; yet the training, retraining, and educational
programs now in operation or contemplated on the Federal level
have little application for persons over 65. The characteristics
of retirement problems are such that each community must
appraise its own potentialities for developing action programs
that will maximize the resources of all its people, including the
elderly.
The retirement outlook has changed considerably since 1964,
when the S-56 field work was conducted. The changes with the
greatest social impact for the elderly are the increases in Social
Security benefits and provisions for obtaining Federal Medical
Care (Public Law 89-97, 196,. These changes create both
optimism for the aged and confidence in the future for those
yet to retire. Still, the inescapable conclusion is that unknown
thousands of the South's 23,000,000 ruralites will eventually
become retirees with incomes less than adequate to maintain
them at common levels of social acceptability.








LITERATURE CITED

1. Alleger, Daniel E., Rural Farm Retirement, Florida Agr. Experiment
Station Bul. 583, February 1957, pp. 40-44.
2. Bailey, Betty W., Daniel E. Alleger, Alice C. Stubbs, and James C.
Fortson, Economic Provisions for Old Age of Rural Families in the
Southern States, Southern Cooperative Series, Bulletin 138, 1968
(Georgia AES, Athens).
3. Stubbs, Alice C., Financial Management Practices Related to Present
Financial Status, Texas Agr. Experiment Station, Bulletin B-1064,
April 1967, p. 17.
4. Stubbs, Alice C., Use of Leisure-Time in Middle Years and Anticipated
Use in Older Age, Texas Agr. Experiment Station, Bulletin B-863,
1968.




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