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Losing a significant amount of your net worth not only threatens your ability to pay the bills — it could eventually prove fatal.
When middle-aged and older Americans had a sudden loss of wealth, there was a significantly higher risk of death, according to a study released this week by Northwestern Medicine and the University of Michigan. The 20-year study of 8,000 adults 50 years and older found that when people lost 75% or more of their total wealth within a two-year period, they were 50% more likely to die within the next two decades. The study, which had check-ins with the participants every two years, saw more than a quarter of participants experienced a wealth shock during the 20 years.
Researchers also examined a group of low-income Americans with no wealth accumulation and saw that they were even more vulnerable, with a 67% greater risk of mortality over 20 years. “The most surprising finding was that having wealth and losing it is almost as bad for your life expectancy as never having wealth,” said Lindsay Pool, a research assistant professor of preventive medicine at Northwestern University Feinberg School of Medicine.
See: Worried about the stock market dropping? Here’s how to protect your nest egg
But why is there such a strong correlation? Three theories: Such a sudden financial loss is devastating, making medical care becomes less affordable, so people may not take care of themselves the way they should. Health care costs have been growing for years: An American couple retiring in 2017 could expect to spend $275,000 in health care throughout retirement, up 6% on the year.
Secondly, a financial loss can be a blow to someone’s mental health and also lead to post-traumatic stress disorder, where people blur what should be perceived as a life-threatening scenario with one that is not, a 2012 study from the Weizmann Institute of Science found. “They may experience strong emotional reactions in inappropriate situations,” the report stated.
What’s more, the ability to pursue one’s dreams and explore further education may also be impacted by a sudden loss of wealth and previous research has linked educational attainment and adult mortality.
Also see: Good news: Just 40% of Americans are at risk of going broke in retirement
Another alarming possible side effect: It’s harder to make up for that sudden loss in the later stages of life, as people were planning to wind down their working hours by choice or due to medical reasons, and they may not be able to find jobs to make up for the shortfall in finances.
In addition, the hiring process for older workers is often unkind.
Dozens of companies were found to use Facebook FB, -1.86% adverts to deter older workers from applying, according to a ProPublica and New York Times investigation. Older workers may be protected in the workplace against age discrimination under the Age Discrimination in Employment Act of 1967, but during the hiring process it’s difficult to prove.