Lack of Financial Planning Linked to Higher Risk of Death
By PLOS
Long-term planning could be especially advantageous for
the health of individuals with limited financial means.
Individuals from lower socioeconomic backgrounds often
face reduced life expectancies, a situation influenced by various factors like
limited healthcare spending and the mental impact of economic disparity.
Additionally, earlier research indicates that numerous
families face challenges in financially planning for their later years. Yet,
there is limited exploration into whether the act of making proactive financial
choices could be linked to a decreased mortality risk.
Link Between Financial Planning and Mortality Risk
To address this potential link, Gladstone and Hundtofte
analyzed data spanning a 22-year period for 11,478 older people living in the
US and participating in the Health and Retirement Study, as well as 10 years’
worth of data on 11,298 UK participants in the English Longitudinal Study of
Ageing.
Both studies asked participants to complete
questionnaires that included questions about health, life expectancy, and how
far into the future they typically planned their finances when making spending
or saving decisions.
Findings: Financial Planning and Health Outcomes
The researchers found that people who planned their
finances further into the future had a lower risk of dying during the study
periods. This association held true even after statistically accounting for
other factors that could affect mortality risk, such as demographics, income,
and self-reported life expectancy—which could inform financial planning
decisions.
In addition, people who planned further into the future had better self-reported health, and this association was strongest for the least financially advantaged participants. The researchers note this finding suggests that longer-term planning may be most beneficial for the health of people without financial buffers for large or sudden expenses.
The researchers also note that these findings do not
confirm a cause-effect relationship and more research is needed. Nonetheless,
this study could help inform efforts to reduce health disparities among older
people.
The authors add: “Our study suggests that a lack of financial planning is not only bad for your wallet, but also for your health and longevity. By encouraging people to think more about their future needs and goals, we may be able to improve their well-being and reduce health disparities.”
Reference: “A lack of financial planning predicts
increased mortality risk: Evidence from cohort studies in the United Kingdom
and United States” by Joe J. Gladstone and C. Sean Hundtofte, 27 September
2023, PLOS ONE.
DOI: 10.1371/journal.pone.0290506
