COLUMBUS, Ohio -- A new study underscores the need for seniors to maintain their health -- in order to maintain their wealth. Building on a 2003 study that found that healthy seniors are more likely to retain their savings, Ohio State University researchers have now discovered that the later in life a serious illness occurs, the more damage it does to a persons finances.
The study found that when seniors develop a new and serious health problem -- experiencing what the researchers call a health shock -- early in retirement, they lose a substantial portion of their savings immediately. But if they experience the health shock later in life, they will lose even more.
Study participants over 70 years of age lost 40 percent more of their savings than similar seniors who were just four years younger.
The results appear in a recent issue of the Journal of Population Economics.
The impact of health problems on seniors finances has been studied over the years, but scientists have drawn different conclusions -- in part because they measured health and wealth in different ways, said Jinkook Lee, professor of consumer sciences at Ohio State.
This study is the first to gather a long-term perspective on how chronic illness diminishes seniors wealth over time.
When someone has a chronic health problem, they tend to find a way to manage in their daily life, but financially, the negative effect doesnt go away, Lee said. If you develop diabetes, for instance, it costs you for your entire life.
She and coauthor Hyungsoo Kim of the University of Kentucky, Lexington, have been tracking the health and wealth of seniors using a broad based, national survey: the National Institute on Agings Asset and Health Dynamics of the Oldest Old (AHEAD) survey.
In a 2003 study of AHEAD data, they found that seniors who maintain their health are 6 to 7 percent more likely to retain a significant portion of their savings, co
|Contact: Jinkook Lee|
Ohio State University