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Poor financial capability can have important consequences for well-being in later life, according to Annamaria Lusardi, Olivia Mitchell, and Noemi Oggero, the authors of Understanding Debt in the Older Population. To explore aspects of financial management related to debt, the authors designed and analyzed a new module in the 2018 Health and Retirement Study along with information from the 2018 National Financial Capability Study to evaluate the factors associated with debt and debt management in later life.

The authors show that, even for older Americans, student loans and unpaid medical bills represent a large proportion of their debt, and having children also contributes to their indebtedness.

By contrast, the more financially literate have more positive financial perceptions and behaviors. Specifically, being able to answer one additional financial literacy question correctly is associated with a higher probability (3-6 percentage points) of reporting an above-average credit record and planning for retirement. Clearly, financial knowledge can help limit debt exposure at older ages.

Other Retirement Research

US Government Accountability Office: Individual Retirement Accounts: IRS Could Better Inform Taxpayers about and Detect Noncompliance Related to Unconventional Assets and Private Pensions: IRS and DOL Should Strengthen Oversight of Executive Retirement Plans

AARP Public Policy Institute: The Time Has Come: Adopting a Common Data Language to Enhance Mobility

Institute for the Study of Labor: Demography and Provisions for Retirement: The Pension Composition, a Behavioral Approach, Working Life and Human Capital Investment: Causal Evidence from Pension Reform, and Influence in Economics and Aging

Employee Benefits Research Institute: How Much More Secure Does the SECURE Act Make American Workers: Evidence From EBRI’s Retirement Security Projection Model

National Bureau of Economic Research: Drug Firms’ Payments and Physicians’ Prescribing Behavior in Medicare Part D

US National Center for Health Statistics: Problems Paying Medical Bills, 2018

Center for Retirement Research at Boston College: An Introduction to Police and Fire Pensions

Max Planck Institute for Demographic Research: Working and disability expectancies at old ages: the role of childhood circumstances and education

International Longevity Centre: Building the case for mid-life career interventions – A literature review informed by the experience of Aviva UK

US Social Security Administration: SSI Monthly Statistics, January 2020

Center on Global Demography of Aging: Going Beyond GDP with a Parsimonious Indicator: Inequality-Adjusted Healthy Lifetime Income

Urban Institute: How Have Teacher Pensions Changed since the Great Recession?