As people get into their 60s or 70s, they start to spend less in order to conserve their assets. A new study sheds light on one possible reason why: pessimism.
When it comes to finances, “our ability to reliably anticipate the future weakens as we age,” says study author Matt Fellowes, former chief executive of HelloWallet, a Morningstar Inc. subsidiary that helps employees manage their paychecks and workplace benefits.
For the many Americans who haven’t saved enough for retirement, this tendency toward frugality isn’t necessarily a bad thing.
But for those who have saved diligently, “they are not enjoying retirement in the way they should,” says Mr. Fellowes, who plans to launch an online financial advisory service aimed at people 50 and over this summer.
Published Monday, the study examined responses to the University of Michigan surveys of consumers from 1978 to 2014. The study found that in 2014, in comparison to people under 35, adults over 64 were 30% to 40% less optimistic about their future financial health and the U.S. economy and stock market. This “optimism gap” persisted when Mr. Fellowes controlled for income, education and gender.
The study also found that people spend less as they age—about 2.5% less, on average, in each successive year between 60 and 70 and by more in later years.
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May 16, 2017 at 03:13PM
from Brian Hershberg