2023-10-02 17:54:17
“You can’t necessarily say that A equals B, with A being long-term financial planning and B being reduced risk of death,” said John
(HealthDay News) — Planning for your long-term financial future doesn’t just make financial sense: It could also save your life.
People in the United States and the United Kingdom have a higher risk of dying prematurely if they do not engage in long-term financial planning, according to a report published online September 27 in PLOS One. In fact, researchers found that the more The shorter a person’s financial planning horizon, the greater their risk of dying.
“The people who live the longest are the ones who look years into the future,” lead researcher Joe Gladstone, an assistant professor of marketing at the University of Colorado Boulder, said in a university question-and-answer session.
“It’s very scary how many people live paycheck to paycheck, paycheck to paycheck,” Gladstone added. “Most people have a financial vision of less than a month. ”The study also revealed that long-term financial planning is more important for the health of those with fewer resources. Increases in financial planning were significantly associated with better health among households earning less than $80,000 a year and with total wealth less than $450,000, the results showed.
“Planning benefits health for the economically disadvantaged more than for the advantaged, because those with greater wealth and income have a financial cushion against income or expenditure shocks, protecting them from experiencing financial difficulties,” the authors explained in their article. . “These results are consistent with the idea that planning ahead represents an important resource for those with few financial resources, possibly because they do not have the cushion to face shocks,” the researchers concluded.
“What you can say is that if you have a set of mental or physical characteristics that naturally lead you to do long-term financial planning, the odds are very high that there will be a reduced risk of death at that point.”
For the study, the researchers accessed two large data sets, one in the United States and one in the United Kingdom. The US data followed almost 11,500 people over a 22-year period, between 1992 and 2014, while the UK data covered about 11,300 people over a decade, from 2002 to 2012. Short-term planners in the US study had an approximately 20% higher relative risk of premature death compared to long-term planners, the results showed.
The results were even more striking in the United Kingdom, where short-term financial planning was associated with an almost 50% higher relative risk of premature death compared to long-term planning. “I think this really shows the importance of what we like to say: your health is your wealth and your wealth is your health,” said Genevieve Waterman, director of economic and financial security at the National Council on Aging. Stress caused by financial uncertainty is likely the main culprit behind this increased risk of premature death, said David John, senior policy advisor at the AARP Public Policy Institute.
“We know that stress is bad for your health and that stress can kill, and having a long-term financial plan is a way for people to reduce that stress,” John said. “When you ask people what some of the big stressors in life are, and AARP researches some of this, one that always comes up is having enough money for retirement or having enough money to pay my bills,” John added.
“It makes sense that having long-term financial planning as part of your life is going to reduce the risk.” The researchers also postulated that people with a long-term plan can also afford preventative care that can help avoid health problems. chronic. However, John noted that this was an observational study that cannot rule out other factors that could influence the relationship between health and financial planning. For example, people who actively plan their finances might also lead a healthier lifestyle, John said.
“I think this really shows the importance of what we like to say: your health is your wealth and your wealth is your health,” said Genevieve Waterman, director of economic and financial security at the National Council on Aging.
“You can’t necessarily say that A equals B, with A being long-term financial planning and B being reduced risk of death,” John said. “What you can say is that if you have a set of mental or physical characteristics that naturally lead you to do long-term financial planning, the odds are very good that there is a reduced risk of death at that point.”
Unfortunately, the low- and middle-income people who would benefit most from financial planning are the least likely to be able to access it, Waterman said. “I would love to see more opportunities to provide universal access to financial planning and wealth management.” in general, and also provide universal financial literacy to understand the basics of finance,” he said.
John recommends that people trying to reduce their financial stress start by writing down their purchases and expenses for a couple of months, from major bills to a daily stop at a coffee shop. “Once you do that, it gives you an idea of what you’re really spending money on and whether that really meets what you want or need,” he said.
“In my case, for example, I was a little surprised that I was spending so much money on small items during the day that I didn’t really need.” People should also include health care in their financial planning, Waterman said. “What I’ve seen is that older adults tend to have more money out of pocket for deductibles, copays and prescriptions, and it’s not really included in their overall budget,” she said.
The results were even more striking in the United Kingdom, where short-term financial planning was associated with an almost 50% higher relative risk of premature death compared to long-term planning.
More information: The National Council on Aging has more information about financial planning for seniors.
SOURCES: Genevieve Waterman, DSW, director, economic and financial security, National Council on Aging, Arlington, Va.; David John, MBA, senior policy advisor, AARP Public Policy Institute; PLOS One, September 27, 2023, online.
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