A Lack of Financial Planning Predicts Increased Mortality Risk: Evidence From Cohort Studies in the United Kingdom and United States

In brief

People who plan their finances over a longer horizon live longer. Linking two national cohorts of older adults (11,478 in the US, 11,298 in England) to government death records, a one standard deviation shorter planning horizon carried a 7 to 9 per cent higher hazard of dying, after accounting for wealth, health and self-rated life expectancy. Planning horizon appears to mark something about a person that matters well beyond their bank balance.

Abstract

We investigate whether a lack of planning and future-orientation in financial behavior is associated with a higher mortality risk. Our evidence is based on two nationally representative cohorts of older people living in the United States ( n = 11,478) and England ( n = 11,298), where we compared individuals’ self-reported planning horizons on spending and saving with government mortality records. Controlling for demographics, participants with a 1 SD shorter planning horizon had a 9% greater hazard of dying in the English sample (evaluated over 10 years), and a 7% greater hazard in the US sample (over 22 years). These differences in mortality risk could not be explained by variation in respondent’s life expectancy, their financial circumstances or a range of other observable covariates. Similar results are found for self-reported health, with the positive association between longer planning horizons and health strongest for those with fewest financial resources.

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