Financial Ruin Can Be Hazardous To Your Health

Losing your nest egg is apparently hazardous to your health — very hazardous.

An analysis involving more than 8,000 Americans found that those who suffered a "negative wealth shock" — defined as losing at least 75 percent of their wealth in two years — faced a 50 percent increased risk of dying over the next two decades.

"That was surprising," says Lindsay Pool, a research assistant professor of preventive medicine at Northwestern University. "A 50 percent increased risk of mortality over a 20-year period is a lot."

The study is the first to find an association between financial catastrophes and an increased risk of dying in the long term, Pool says. The results were published Tuesday in JAMA, the journal of the American Medical Association.

Previous research had found that financial problems can have short-term negative effects on health, Pool says. The Great Recession from 2007 to 2009, for example, increased the risk of developing high blood pressure and depression.

Pool and her colleagues analyzed data collected every two years between 1994 and 2014 from 8,714 adults ages 51 to 61 when they got involved in the Health and Retirement Study, an ongoing nationally representative study.

The researchers were not expecting to find that 2,430 of the study subjects — more than a quarter — experienced a negative wealth shock.

"So this is an issue that is potentially impacting millions of Americans," Pool says.

The researchers compared those who experienced a negative wealth shock to those who had never had much money. They found the loss of money put the two groups at almost the same level of risk for dying prematurely.

"You would hope that having had some money at some point would provide some protective effect," Pool says.

Other researchers who study the relationship between economics and health noted the strength of the association between a big financial setback and mortality.

"The magnitude of it is quite remarkable," says Ellen Meara, a professor of health policy at the Dartmouth Institute. "If it's losing the wealth that's causing it, I think we want to ask ourselves: 'Is there any way to protect people against that kind of a shock?' "

The researchers stressed that they couldn't rule out the possibility that health problems were the reason people lost so much money in the first place and that the same health problems put them at increased risk of dying prematurely. But Pool says the researchers tried to factor that into the analysis and found the association persisted even when existing health problems were taken into account.

Suddenly losing wealth could increase the risk of dying in many ways, she says. It could create stress and increase the risk of conditions like depression or high blood pressure, as previous research has found, that heighten the odds of dying over the long term. People who experience bankruptcy could also have a harder time affording medical care, such as doctors' visits and medications, she says.

"It could be not going to the doctor as much," Pool says. "At this age group, a lot of people may be on prescription medications and they could not be taking their medications as prescribed because they can't afford the co-pays."

Other researchers say the findings are important because of the possibility of future economic problems. "If the economy grows more volatile and we face an economic contraction, we could see more people losing wealth and leading to a higher mortality," says Arun Hendi, an associate demographer at the University of Southern California. "It's very disturbing."

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