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.