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Mental health and retirement savings: Confounding issues with compounding interest
Author(s) -
Bogan Vicki L.,
Fertig Angela R.
Publication year - 2018
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/hec.3579
Subject(s) - pension , financial distress , affect (linguistics) , mental health , depression (economics) , government (linguistics) , productivity , retirement age , demographic economics , economics , business , labour economics , actuarial science , finance , medicine , psychology , economic growth , psychiatry , linguistics , philosophy , communication , macroeconomics , financial system
Summary The questionable ability of the U.S. pension system to provide for the growing elderly population combined with the rising number of people affected by depression and other mental health issues magnifies the need to understand how these household characteristics affect retirement. Mental health problems have a large and significant negative effect on retirement savings. Specifically, psychological distress is associated with decreasing the probability of holding retirement accounts by as much as 24 percentage points and decreasing retirement savings as a share of financial assets by as much as 67 percentage points. The magnitude of these effects underscores the importance of employer management policy and government regulation of these accounts to help ensure households have adequate retirement savings.