Brett Arends's ROI: Get rich, live longer

United States

Here’s another good reason to start saving as much as possible and as early as possible, instead of putting off retirement savings until your middle years.

The more money you’ve got by the time you’re in your 40s, the more likely you are to make it past 70. The advantage is pretty hefty. Those with about $ 140,000 more money to their name by their late 40s are 13% less likely to die by 70.

And it’s true even when you exclude all other factors, such as whether (for example) you are better educated, or come from a more advantaged background. It’s true even among siblings and twins. Identical twins as well as fraternal ones.

So finds a new research study published in the Journal of the American Medical Association. It’s based on a unique and valuable database of more than 5,000 Americans tracked through MIDUS or the Midlife in the United States Study. Participants were interviewed in the mid-1990s. Researchers then followed up in 2019-2021. (It’s not clear how much Covid affected the numbers.)

The average participant was around age 47 in the mid-1990s, when first interviewed, and either was (or would have been) around 70 in the follow up. Most of the initial participants survived: More than 4 out of 5 made it. But the differences when sorted by wealth were dramatic. “This cohort study found that wealth accumulated at midlife was associated with longevity in U.S. adults,” the researchers found. “A difference of $ 139,000 in net worth was associated with a 13% relative decrease in the probability of death nearly 24 years later,” they wrote. And that was true within families. “The sibling and twin with more wealth tended to live longer than their co-sibling or co-twin with less wealth,” they found.

There are multiple reasons for this. Those with more money are likely to get better healthcare. They are likely to live in safer and healthier neighborhoods. They are likely to have dangerous or physically demanding jobs. And they are likely to suffer from less economic stress. Worrying about money, or about losing your job, can take a heavy toll.

No, this isn’t the first study to find or suggest a link between money and longevity.

Research a few years ago found, horrifically, that the life expectancy gap between the richest 1% and the poorest 1% was more than a decade. “The gap in life expectancy between the richest 1% and poorest 1% of individuals was 14.6 years…for men and 10.1 years…for women,” wrote researchers in 2016.

Admittedly they’re comparing extremes—the richest and poorest 1% — but that gap is remarkable.

But the latest study goes further than past research, because the database helped researchers isolate wealth as an independent factor on its own. Especially by looking at the lives of siblings and twins. So midlife wealth was associated with a better chance of making it to 70 even after accounting for sex, parents’ education or ethnicity, all of which are also factors. (Men, those whose parents had less education, and people of color all face a higher risk of dying young.)  

And it shows that the wealth effect on health kicks in early. It’s not enough to have money by your 60s. You want to have it by middle age.

OK, all of these studies have limitations. For example, do richer siblings live longer than poorer ones because they are rich, or are the longevity and the wealth symptoms of other factors? Someone suffers terrible bad luck and tragedy in their life. They end up poorer and they also die young. Did they die young because of the money or the bad luck? You can ask the same of people who make unwise life choices. Give someone who is self destructive a pile of money and they may live longer, or it may bring them to disaster sooner.

We already know from other studies that the poor are more likely to become obese and obesity can kill you. But does poverty make you obese, or are poverty and obesity both products of other factors? (Incidentally, although eating healthy food can cost a lot, it certainly doesn’t have to.)

There are obvious public policy imperatives that come out of this research, including everything to do with tackling poverty and the causes of poverty. But there are also personal finance implications.

Nonetheless, if we accept that money helps you live longer, this raises the stakes for saving and investing early. Those who start saving in their 20s have an advantage over everyone else that they’ll never lose. The math on this is unambiguous. Thanks to compound interest, a dollar invested in your mid-20s is probably worth three or four times as much for your ultimate retirement than a dollar invested in your mid-40s.

Bottom line? Save often, save early. It could save your life.