Many Americans die with virtually no financial assets: study

Innovative research shows large divergence in retirement saving outcomes, with the single elderly faring worse than married couples.

CAMBRIDGE, Mass. - It is a central worry of many Americans: not having enough money to live comfortably in old age. Now an innovative paper co-authored by an MIT economist shows that a large portion of America's older population has very little savings in bank accounts, stocks and bonds, and dies ''with virtually no financial assets'' to their names.

Indeed, about 46 percent of senior citizens in the United States have less than $10,000 in financial assets when they die. Most of these people rely almost totally on Social Security payments as their only formal means of support, according to the newly published study, co-authored by James Poterba of MIT, Steven Venti of Dartmouth College, and David A. Wise of Harvard University.

That means many seniors have almost no independent ability to withstand financial shocks, such as expensive medical treatments that may not be covered by Medicare or Medicaid, or other unexpected, costly events.

''There are substantial groups that have basically no financial cushion as they are reaching their latest years,'' says Poterba, the Mitsui Professor of Economics at MIT.

However, the study - one of the first to examine Americans' end-of-life finances - also reveals a diversity of outcomes among senior citizens. Between 1993 and 2008, it found, unmarried older individuals had median wealth of about $165,000 roughly a year before they died - a figure that includes current and future Social Security income, job-related pension benefits, home equity and financial assets. In the same period, the median wealth for continuously married senior citizens, roughly a year before they died, was more than $600,000.