A midlife ‘wealth shock’ could have you losing more than money, a new study suggests.
Middle-aged people who experience a substantial, large economic loss were found more likely to die in the following years than those whose finances were stable. The researchers have coined this higher chance of death after a loss a ‘wealth shock’, which can affect anyone regardless of socio-economic lines.
The study examined nearly 9,000 people, highlighting the connections between money and well-being, with past studies linking lower incomes and rising income inequality with chronic disease and lower life expectancy.
“This is really a story about everybody,” said lead researcher Lindsay Pool of Northwestern University’s medical school. “Stress, delays in health care, substance abuse and suicides may contribute. Policymakers should pay attention.”
Wealth shock was associated to a 50 per cent greater risk of dying, though the study couldn’t completely prove a cause-and-effect relationship. About 1 in 4 of the participants had wealth shock, which is defined as a 75 per cent or more loss in net worth over a two-year span. The average loss was around $100,000.
Even with researchers adjusting for marital changes, unemployment and health status, the financial crisis-death link persisted. Women were found to be more susceptible to wealth shock, too. The effect was even more dramatic if the loss included the person’s home, and even more pronounced for people with fewer assets.
The final findings suggest wealth shock can be as dangerous as heart disease, says Dr. Alan Garber of Harvard University in an accompanying editorial, who adds doctors need to understand how money hardships can affect their patients.
“We should be doing everything we can to prevent people from experiencing wealth shocks,” said Dr. Steven Woolf, director of the Virginia Commonwealth University Center on Society and Health, who was not involved in the study.
What exactly to do, however, may take more research, notes Katherine Baicker, dean of the Harris School of Public Policy at University of Chicago.
“We don’t yet know whether policies that aim to protect people’s savings will have a direct effect on mortality or not,” Baicker said. “But that’s not the only reason to try to protect people’s savings.”
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