Standards of Living and Retirement
The survey measured net worth including savings, home equity, the value of social security and pension benefits and found the following results: single people had average assets of $142,000, those whose spouse had died previously had $253,000, and couples where the surveyed spouse died, but the other was still living had $692,000.
The survey produced a couple of worrisome results. First, those who have a substantial amount of money outside of a smaller savings account may not have as much capacity to absorb a shock. Second, single people and married couples experienced a pretty steady retirement income while retirees whose spouse died experienced a steep drop in income–almost 75% during the survey period. Third, the most shocking of the results is that there is a “‘strong and consistent'” relationship between wealth and survival.
The Wall Street Journal follows these survey results by recommending the best ways to achieve a desirable retirement outcome. Getting rich or getting married and staying married pay off in retirement. Married people are more likely to have home equity and more likely to have more in savings. The individuals who faired the best in the survey were those who were married at the beginning, remain married when their spouse dies, and were not the first to die.
See Andrea Coombes, Half of Americans Die With Almost No Money, The Wall Street Journal, Aug. 29, 2012; see also Michael Lombardi, What We’ve Come To: About Half of Retired People in the U.S. Die With Less Than $10,000 in Financial Assets, Profit Confidential, Aug. 16, 2012.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.