Midlife ‘wealth shock’ may lead to death, study suggests

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Cut stacks of $100 bills make their way down the line at the Bureau of Engraving and Printing Western Currency Facility in Fort Worth, Texas. Middle-aged Americans who experienced a sudden, large economic blow were more likely to die during the following years than those who didn’t. (AP Photo/LM Otero)
Cut stacks of $100 bills make their way down the line at the Bureau of Engraving and Printing Western Currency Facility in Fort Worth, Texas. Middle-aged Americans who experienced a sudden, large economic blow were more likely to die during the following years than those who didn’t. (AP Photo/LM Otero)

A big financial loss may shorten your life, a new study suggests.

Middle-aged Americans who experienced a sudden, large economic blow were more likely to die during the following years than those who didn’t. The heightened danger of death after a devastating loss, which researchers called a “wealth shock,” crossed socio-economic lines, affecting people no matter how much money they had to start.

The analysis of nearly 9,000 people’s experiences underscores well-known connections between money and well-being, with prior studies linking lower incomes and rising income inequality with more chronic disease and shorter 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, she said. “Policymakers should pay attention.”

Overall, wealth shock was tied with a 50 percent greater risk of dying, although the study couldn’t prove a cause-and-effect connection. The study was published Tuesday in the Journal of the American Medical Association.

Researchers analyzed two decades of data from the Health and Retirement Study, which checks in every other year with a group of people in their 50s and 60s and keeps track of who dies.

About 1 in 4 people in the study had a wealth shock, which researchers defined as a loss of 75 percent or more in net worth over two years. The average loss was about $100,000.

That could include a drop in the value of investments or realized losses like a home foreclosure. Some shocks happened during the Great Recession of 2007-2009. Others happened before or after. No matter what was going on in the greater U.S. economy, a wealth shock still increased the chance of dying.

Women were more likely than men to have a wealth shock. Once they did, their increased chance of dying was about the same as the increase for men. Researchers adjusted for marital changes, unemployment and health status. They still saw the connection between financial crisis and death.

The effect was more marked if the person lost a home as part of the wealth shock, and it was more pronounced for people with fewer assets.

The findings suggest a wealth shock is as dangerous as a new diagnosis of heart disease, wrote Dr. Alan Garber of Harvard University in an accompanying editorial, noting that doctors need to recognize how money hardships may affect their patients.

The findings come at a time when U.S. life expectancy has dropped for two straight years.

“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, said Katherine Baicker, dean of the Harris School of Public Policy at University of Chicago, who also was not involved in the study.

“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.”