Kim, H. & Lyons, A. C. (2008). No Pain, No Strain: Impact of Health on the Financial Security of Older Americans. The Journal of Consumer Affairs; Spring 2008, 42(1), 9-36.

Brief Description: This study investigated the impact that new and existing health problems have on the financial strain of older Americans. Health problems significantly increased the likelihood of financial strain for older individuals, but the effects varied by the measure of financial strain used and how health status is defined. Specifically, existing health conditions were more likely to affect solvency and investment asset accumulation than liquidity, while new health events were more likely to affect solvency.

Implications: Financial education can help future retirees better prepare for rising health care costs and avoid unnecessary financial burden in later life. In particular, financial professionals and educators may want to provide individuals with a better understanding of how negative health events can affect their financial portfolios and how to shift their assets to hedge against serious financial strain. Also, it would be useful for individuals to have more guidance on how to build future health care expenditures into their existing savings and retirement plans, so that they are setting aside an adequate amount in a ‘‘health care fund.’’ [category:Financial Security: Lifestyle Transitions Research]]