Aging & Social Change: Twelfth Interdisciplinary Conference

Abstract

Financial security has been shown to play a protective role for emotional well-being. However, little has been known about the protective role of sufficient financial resources in mitigating the risks of negative outcomes in mental health and daily life functioning. Using longitudinal survey data collected between 2000 and 2019 and retrieved from the SHARE database, we examined the role of sufficient financial resources, including different types of savings, for protecting against depression, loneliness, and a decline in the daily life functioning. Multivariate proportional hazards model with time-varying covariates as well as the cross-lagged panel model were applied. E-values were calculated to examine sensitivity of associations to unmeasured confounding and a series of secondary analyses provided evidence on robustness of the results. We found that having moderate financial assets is associated with a 10% reduction in the risk of depression over a two-year period and even higher reduction in the risk of limitations in daily life functioning and experiencing loneliness. Possessing savings equal to at least semi-annual incomes is associated with a 25% reduction in limitations in daily life functioning. Short-term savings are shown to be prospectively associated with all measured outcomes with particularly large effect for daily life functioning. Long-term savings are not found to be protective against depression but, particularly when high, they are associated with reduced risk of loneliness and limitations in daily life functioning. The effects of financial conditions on subsequent health and of health on subsequent financial conditions are presented.