August 6, 2012 · 0 Comments
A shocking 46.1 percent of Americans die with less than $10,000 to their names and rely on Social Security benefits to pay the bills, according to a recent study by James Poterba at MIT, Steven Venti at Dartmouth and David Wise at Harvard.
Many of these people don’t even own a home according to the study, which looked at the wealth of people of all ages from 1993 until 2008.
These statistics are alarming because elderly people often have among the highest medical expenses and are ill-equipped to pay bills, the authors wrote:
Based on a replacement rate comparison, many of these households may be deemed to have been well-prepared for retirement, in the sense that their income in their final years was not substantially lower than their income in their late 50s or early 60s. Yet with such low asset levels, they would have little capacity to pay for unanticipated needs such as health expenses or other financial shocks or to pay for entertainment, travel, or other activities. This raises a question of whether the replacement ratio is a sufficient statistic for the “adequacy” of retirement preparation.
And here’s a graph showing the wealth of elderly people in one-person, widowed and two-person households:
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