Insights into the Financial Experiences of Older Adults: A Forum Briefing Paper, July 2013

Board of Governors of the Federal Reserve System (U.S.)

Reports and Studies from Board of Governors of the Federal Reserve System (U.S.)

Abstract: The U.S. population is aging rapidly. By 2060, more than one in five individuals in the United States will be over the age of 65, up from one in seven today. The older adult population, here, defined as those 40 and older, represents multiple generations of individuals with varying financial circumstances and needs. Data show older adults as a group hold a greater share of household net worth than younger cohorts. However, substantial-and, for some, potentially irrecoverable-wealth losses resulting from the financial crisis are particularly acute for households without the capacity to work or without the time to recoup losses. Meanwhile, the financial marketplace has become increasingly complex due to the diversity of products and services, new payment methods, and emerging technologies. As older adults represent a growing share of the overall population, the convergence of these demographic, economic, and technological trends raises questions about the financial experiences of older adults in the years ahead. Noting these trends, in 2012, the Federal Reserve Board’s Division of Consumer and Community Affairs began exploring these issues to better understand the financial experiences of older adults. Staff reviewed existing data and research and engaged with a number of external research and policy experts for perspectives on the economic implications of the demographic trends and changing financial landscape for older populations. This initial exploration identified a number of questions related to older adults’ financial lives that were not fully answered from existing data. In response, the Board conducted an online survey (the “Older Adult Survey”) in December 2012 to add to the collective base of knowledge and to better understand aspects of the financial lives of adults as they age. The survey was intended to be exploratory-ultimately confirming some insights and raising questions about other areas worthy of additional study. A particular aim was to help identify important issues for further research and analysis about the financial preparedness and stability of older adults to be explored by the field at large. The Older Adult Survey was fielded online using the RAND American Life Panel.1 The 1,821 survey participants ranged in age from 40 to 94 and were grouped into age cohorts.2 Details about the survey, its methodology, and limitations can be found in the body of the report and in a methodological appendix.

Date: 2013
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