If a newly release report is any indication, most children
shouldn't expect a big inheritance from their parents. A new
working paper from the National Bureau of Economic Research finds
that 46 percent of Americans die with less than $10,000 in
financial assets.
The
study
, which tracked senior citizens from 1993-2008, grouped seniors by
their marital status to examine the differences between these
categories:
- Always single
- Married at the start of retirement, but single by death
- Married until death
Married seniors fare the best
Single seniors were most likely to have low incomes and limited
assets. The study found 52 percent of individuals in this category
lived on less than $20,000 annually and died with less than $10,000
in financial assets.
Seniors who were married at the time of retirement but outlived
their spouse fared better with only 36 percent falling below those
income and asset levels. Individuals who were still married at
death seemed to be the most financially secure with only 26 percent
living below those levels.
In addition, single individuals had significantly lower annual
wealth than those who were married. According to the research,
unmarried seniors had a median annual wealth of $165,000. That
figure included both current and future
Social Security income
as well as pensions, home equity and financial assets such as CDs,
money market accounts and savings accounts.
Individuals who were married at death again fared better, with a
median annual wealth of $600,000.
More money correlated with a longer life
The study also discovered that those who had greater wealth in
1993 tended to live longer lives. This finding held true across a
variety of assets. Those whose homes were worth more, who had
larger retirement incomes and who had more money in their savings
accounts consistently outlived those with less income and
assets.
The reason for the correlation between health and wealth is not
completely understood, but the study authors say their findings
underscore patterns previously detected in other research.
Author James Poterba of MIT says the issue of wealth and senior
citizens merits further research and discussion. He believes
additional studies may help identify mechanisms to help seniors who
find themselves struggling financially late in life.
In the meantime, working adults may be well-advised to revisit
their savings rates and determine whether additional money could be
placed in money market accounts
, IRAs or retirement funds to help them better prepare for their
golden years.