I’ve discussed previously about how New York bankruptcy can help people live longer, and it’s motivated me to continue watching out for academic studies on how losing income or wealth affects people. The Journal of the American Medical Association (JAMA) produced one such study that purports to be the first of its kind: Tracking the long-term effects of financial losses among middle-aged Americans over twenty years. The study concluded that these Americans are more likely to die than middle-aged Americans who do not lose their savings. Moreover, such losses are alarmingly common: over the study period more than one participant in four lost most of his or her life savings. Losing wealth frequently accompanies bankruptcy, so here are some details of the study and its findings.
The study analyzed data from 8,714 participants in the National Institute on Aging’s Health and Retirement Study, covering the years from 1994 to 2014. The participants were between the ages of 51 and 61 when they joined the National Institute’s study, with the mean-average age being 55. They self-reported their health and finances every two years, which included questions on the values of their assets and liabilities.
The authors found that 2,430 participants (28 percent) had at least one “negative wealth shock” during the study period. This means that they lost at least 75 percent of their total net worth over the two-year period. Another 749 (9 percent) experienced “asset poverty,” meaning zero or negative total net worth when they entered the study. 2,823 participants passed away during the study period, but the mortality rates differed among those classified in the “continuously positive wealth without shocks” category, those who suffered a negative wealth shock, and those in asset poverty. Participants who had negative wealth shocks were 50 percent more likely to die than those with continuously positive wealth, and for those in asset poverty the figure rose to 67 percent.
With these kinds of studies, it’s usually worthwhile to look out for the actual numbers so that people can have some perspective, and the authors provide them. The mortality rate for those who had continuously positive wealth without shocks was 31 per 1,000 person-years. For those with negative wealth shocks and asset poverty, those figures were 65 and 73 per 1,000 person-years, respectively. So fortunately it doesn’t appear that the mortality rate is particularly high overall.
The study has a few weaknesses, first and foremost being that it doesn’t establish a causal connection between wealth loss or poverty and death. The figures were self-reported, so participants may have under- or even over-reported their asset and liability information. Participants who died during the study were also more likely to have owned fewer assets than others at the study to begin with, so that may have been a factor. The authors hypothesized that participants who lost their wealth may have delayed necessary health care, and they noted the likely psychological changes that accompany losses of wealth.
The JAMA study is here (subscription required) and the accompanying editorial is here.
Losing one’s wealth does not mean one’s debts disappear as well. If your financial circumstances have taken a serious turn, then consulting with an experienced New York bankruptcy lawyer can help you assess your options and hopefully keep you in good health.
For answers to more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced Brooklyn bankruptcy attorney Bruce Weiner for a free initial consultation.
