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When The Nest Egg Cracks: Financial Consequences Of Health Problems, Marital Status Changes, And Job Layoffs At Older Ages

Author

Listed:
  • Richard W. Johnson

    () (Urban Institute)

  • Gordon B.T. Mermin

    () (Urban Institute)

  • Cori E. Uccello

    (cuccello@ui.urban.org)

Abstract

The risk of falling into poor health, losing the ability to work or live independently, becoming widowed, and experiencing other negative events that threaten financial security increase with age. This report computes the incidence of these negative events at older ages and examines their impact on economic well-being. Over a 10-year period, more than three-quarters of adults age 51 to 61 at the beginning of the period experience job layoffs,widowhood, divorce, new health problems, or the onset of frailty among parents or in-laws. More than two-thirds of adults age 70 and older experience at least one negative shock over a nine-year period. Incidence rates are even higher at the household level for married people, who face the added risk that their spouses could develop health problems or lose their jobs. Financial consequences are especially serious for older adults who develop work disabilities or long-term care needs, or who become unemployed.

Suggested Citation

  • Richard W. Johnson & Gordon B.T. Mermin & Cori E. Uccello, 2006. "When The Nest Egg Cracks: Financial Consequences Of Health Problems, Marital Status Changes, And Job Layoffs At Older Ages," Working Papers, Center for Retirement Research at Boston College wp2005-18, Center for Retirement Research.
  • Handle: RePEc:crr:crrwps:wp2005-18
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    File URL: http://crr.bc.edu/working-papers/when-the-nest-egg-cracks-financial-consequences-of-health-problems-marital-status-changes-and-job/
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    Cited by:

    1. Alicia H. Munnell & Steven Sass & Mauricio Soto & Natalia Zhivan, 2006. "Has the Displacement of Older Workers Increased?," Working Papers, Center for Retirement Research at Boston College wp2006-17, Center for Retirement Research, revised Sep 2006.
    2. Richard W. Johnson & Janette Kawachi, 2007. "Job Changes at Older Ages: Effects on Wages, Benefits, and Other Job Attributes," Working Papers, Center for Retirement Research at Boston College wp2007-04, Center for Retirement Research, revised Feb 2007.
    3. James M. Poterba & Steven F. Venti & David A. Wise, 2015. "What Determines End-of-Life Assets? A Retrospective View," NBER Chapters,in: Insights in the Economics of Aging, pages 127-157 National Bureau of Economic Research, Inc.
    4. Karen Smith & Mauricio Soto & Rudolph G. Penner, 2009. "How Seniors Change Their Asset Holdings During Retirement," Working Papers, Center for Retirement Research at Boston College wp2009-31, Center for Retirement Research, revised Dec 2009.
    5. Athreya, Kartik B., 2008. "Default, insurance, and debt over the life-cycle," Journal of Monetary Economics, Elsevier, vol. 55(4), pages 752-774, May.
    6. Jody Schimmel & David C. Stapleton, 2010. "Protecting the Household Incomes of Older Workers with Significant Health-Related Work Limitations in an Era of Fiscal Responsibility," Working Papers wp244, University of Michigan, Michigan Retirement Research Center.
    7. Teresa Ghilarducci & Joelle Saad-Lessler & Gayle Reznik, 2017. "Relative Wages in Aging America: Defined Contribution Wealth Inequality: Role of Earnings Shocks, Portfolio Choice, and Employer Contributions," SCEPA working paper series. SCEPA's main areas of research are macroeconomic policy, inequality and poverty, and globalization. 2017-06, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.

    More about this item

    Keywords

    nest eggs; retirement risk; social security; umemployed;

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