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Finances at the End of Life

A lot of retirement planning models have tried to estimate the chances of retirees running short of money in retirement. But a new study takes a look at the end-of-life financial situation in America, and the results provide useful insights for advisors helping workers save for that period.




The study, by the nonpartisan Employee Benefit Research Institute (EBRI) focused on a group of individuals above age 50 who died between the 2010 and 2012 iterations of the University of Michigan’s Health and Retirement Study survey, and documents their last known (2010) economic situation. 




The study found that among those who died at age 85 or older, 20.6% had no non-housing assets and 12.2% had no assets left. Among singles who died at or above age 85, a 24.6% had no non-housing assets left and 16.7% had no assets left. 




However, data show that those who died at earlier ages were generally worse off financially: 29.8% of households that lost a member between ages 50 and 64 had no assets left. Households with at least one member who died earlier also had significantly lower income than households with all surviving members, according to the report. 




The report shows that among singles who died at age 85 or above, 9.1% had outstanding debt (other than mortgage debt); their average debt was $6,368. The average net equity left in their primary residence for those who died at ages 85 or above was $141,147 and $83,471 for couple and single households, respectively.




Perhaps most importantly, the report also shows how important Social Security is to older households. For recently deceased singles, it provided at least two-thirds of their household income; and couple households above age 75 with deceased members received more than 60% of their household income from Social Security.

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