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Running Out of Money is More than Just a Worry for Many Seniors, Study Finds


A new study found 1 in 5 people who were age 85 or older when they died had no assets left apart from their homes, and 12% had no assets left at all, only income from sources such as Social Security or pensions.

Couple discussing money

For many older people and their families, particularly those dealing with conditions such as Alzheimer’s or cancer that often require long-term, pricey medical care, running out of money is a nagging concern.

Families are right to be worried, according to a new study that analyzed data from nearly 1,200 people who died between 2010 and 2012 and who participated in the University of Michigan’s ongoing national Health and Retirement Study.

Among people who were age 85 or older when they died, 1 in 5 had no assets left apart from their homes, and 12% had no assets left at all, only income from sources such as Social Security or pensions. The analysis by the Employee Benefit Research Institute found that those who died younger were even worse off. Among people who died between age 50 and 64, 30% were without assets and 37% had only their homes.

Families where someone died at a relatively young age tend to have lower incomes and assets, says Sudipto Banerjee, a research associate at EBRI and the study’s author.

“People with lower assets and income tend to be in worse health,” he says, noting that many studies have found a correlation between health and wealth, showing that wealthier people tend to live longer than poorer people.

The EBRI study didn’t examine the reasons people’s finances were often depleted at death, so there’s no way to know the extent to which health care, specific illnesses or insurance coverage played a role.

Financial experts have long cautioned that medical care for seniors is an expensive concern, partly because some care related to Alzheimer’s disease, for example, is not covered by insurance. In addition, even with Medicare coverage and private insurance, seniors still can face large out-of-pocket expenses for major illnesses.

According to an estimate by Fidelity, a 65-year-old couple who retired in 2014 would need $220,000 to cover their health care costs during retirement.

Kaiser Health News (KHN) is a nonprofit national health policy news service. Please contact Kaiser Health News to send comments or ideas for future topics for the Insuring Your Health column. KHN’s coverage of aging and long term care issues is supported in part by a grant from The SCAN Foundation.

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