About 57 million U.S. households now have discretionary income, up from nearly 54 million in 1997-1998, according to a new study released today by The Conference Board. But the percentage of the American population with discretionary income has edged down to 51 percent, compared with 52 percent six years ago.

The study shows that 82 percent of all discretionary income is held by those earning $100,000 and more. Average discretionary income for this segment – $62,110 – is nearly three times above the U.S. average of $21,657.

Households with discretionary income, as defined in the study, are those whose spendable income exceeds that held by households with similar demographic features. “Spendable income” is defined as money available after taxes have been paid.

“Discretionary income is a major force in the health and growth of the overall economy,” said Lynn Franco, director of The Conference Board’s Consumer Research Center. “Rising numbers of affluent households who control sizable amounts of discretionary income signal a favorable outlook for the luxury, travel and entertainment markets, as well as companies in the furnishings and housing sectors.”

Households in New York, New Jersey and Pennsylvania top the country in per capita discretionary income ($9,699). Ranking next are households in New England (including Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island and Vermont), where per capita discretionary income is $9,522. Per capita discretionary income is lowest in the West North Central region (including Minnesota, Iowa, Missouri, North Dakota, South Dakota, Nebraska and Kansas) at $7,040.

Households with earnings of less than $50,000 represent about 26 percent of all households with discretionary income, but less than 3 percent of total discretionary income. Average household discretionary income in this group is only $2,075 – 90 percent below the national average.

The Conference Board study shows that households in the 35-50 age group constitute close to 36 million households, and nearly 20 million have discretionary income. This segment represents 34 percent of all households with discretionary income, and approximately 40 percent of all discretionary income.

More than 14 million of the nearly 26 million households headed by persons between the ages of 50 and 65 have discretionary income. These 14 million households, who possess 30 percent of total discretionary income, make up almost 26 percent of all households with discretionary income.

The remaining 22 million households are in the 65-and-over age segment, and 10 million have discretionary income. This segment represents 18 percent of all households with discretionary income and nearly 13 percent of all discretionary income.


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