We estimate how IRA distributions affect the poverty rate of the population aged 65 and older using data from the Survey of Income and Program Participation (SIPP). Previous research has found that the inclusion of medical expenses in the Supplemental Poverty Measure (SPM) leads to poverty rates that are much higher for the population 65 years of age and over, 11.1% compared to 5.8% using the official measure. The SPM does not include distributions from retirement savings account. We find that including these accounts lowers the poverty rate among those 65 and older by 0.7%.

Every several years the SIPP is supplemented by a topical module which measures the retirement income and retirement plan coverage of the population. This module provides more detailed information about retirement plans than core SIPP interviews or the Current Population Survey (CPS) which is used to calculate the official poverty rate. In addition, the information collected allows us to gain a better understanding of who receives IRA distributions and how they are used.