A Look at the End-of-Life Financial Situation in America

24 Pages Posted: 28 Apr 2015  

Sudipto Banerjee

Employee Benefit Research Institute (EBRI)

Date Written: April 2015

Abstract

This paper takes a comprehensive look at the financial situation of older Americans at the end of their lives. In particular, it documents the percentage of households with a member who recently died with few or no assets. It also documents the income, debt, home-ownership rates, net home equity, and dependency on Social Security for households that experienced a recent death. Significant findings include that among those who died at ages 85 or above, 20.6 percent had no non-housing assets and 12.2 percent had no assets left. Among singles who died at or above age 85, 24.6 percent had no non-housing assets left and 16.7 percent had no assets left. Data show those who died at earlier ages were generally worse off financially: 29.8 percent of households that lost a member between ages 50 and 64 had no assets left. Households with at least one member who died earlier also had significantly lower income than households with all surviving members. The report shows that among singles who died at ages 85 or above, 9.1 percent had outstanding debt (other than mortgage debt) and the average debt amount for them was $6,368. The report also shows that the importance of Social Security to older households cannot be overstated. For recently deceased singles, it provided at least two-thirds of their household income. Couple households above 75 with deceased members received more than 60 percent of their household income from Social Security. The data for this study come from the University of Michigan’s Health and Retirement Study (HRS), which is sponsored by the National Institute on Aging, and is the most comprehensive national survey of older Americans.

Notes: The PDF for the above title, published in the April 2015 issue of EBRI Notes, also contains the fulltext of another April 2015 EBRI Notes article abstracted on SSRN: “Measured Matters: The Use of ‘Big Data’ in Employee Benefits.”

Keywords: Aged, Debt, Home equity, Home ownership, Household income, Social Security benefits, Wealth

JEL Classification: D12, D31, J11, J14

Suggested Citation

Banerjee, Sudipto, A Look at the End-of-Life Financial Situation in America (April 2015). EBRI Notes, Vol. 36, No. 4 (April 2015). Available at SSRN: https://ssrn.com/abstract=2599764

Sudipto Banerjee (Contact Author)

Employee Benefit Research Institute (EBRI) ( email )

1100 13th Street, NW
Suite 878
Washington, DC 20005-4204
United States
202-775-6306 (Phone)
202-775-6312 (Fax)

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