The impact of the unit of observation on the measurement of the relative importance of Social Security benefits to the elderly.

Financial adequacy in retirement largely depends on Social Security, pensions, and savings—commonly referred to as the “threelegged stool” of retirement income. Correspondingly, the elderly who receive all of their income from Social Security benefits are recognized as being economically vulnerable. Income of the Population 55 or Older, 2004 reports that 21 percent of beneficiary aged units 65 or older received all of their income from Social Security. Other publications using the same data source as Income of the Population 55 or Older, 2004 have produced different statistics that appear contradictory. The primary purpose of this article is to explain how the choice of the unit of observation plays a role in our perception of the relative importance of Social Security benefits for the elderly.