Half of Americans Die Nearly Broke, New Study Reports

Want Financial Security in Your Later Years? Get Rich or Get/Stay Married

A new study co-authored by an M.I.T. economics professor reports that half of all American retirees die with less than $10,000 in savings.

Because, as we slide into Labor Day weekend, you probably aren't frustrated enough with the ratio of how hard you work to how fat your bank account is (or rather, isn't) …

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The study, which is based on surveys that tracked retirees between 1993 and 2008, concluded that 46 percent of retired Americans have $10,000 or less in their savings accounts when they die.

That statistic is scary, of course, because of the possibility of one major event, like an accident or not-covered medical expense, wiping out that $10,000 and sending the retirees into deep debt.

"They may not have much capacity to absorb a shock," M.I.T. economics professor James Poterba says. "They don’t have very much in the way of liquid assets they can access."

But the stat can be misleading about the lifestyles those retirees might be living.

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"That doesn't mean their standard of living is very low," Poterba tells Marketwatch.com. "They might have a relatively generous pension plan, most of them will have Social Security."

The stat also doesn't necessarily reflect the retirees' net worth, according to the study, though the net worth statistics provide their own illuminating conclusions.

Single retirees, for instance, had net worths of about $142,000, while those who had a spouse that died had $253,000 in assets on average, and couples where the surveyed spouse had died but the other spouse was still living had average net worths of $692,000.

"The group who does the best in terms of average level of financial assets are those who are married when we first see them, remain married when the first person dies … they tend to have higher income levels," Poterba said. "Single individuals on average have lower levels of retirement income as well as lower financial assets."

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The study also found a "strong and consistent" relationship between the amount of money you have and how long you live.

"The relationship between wealth when first observed and subsequent mortality is striking," the study concluded.

"Duh," concluded a not-so-surprised public, which knows money can help you live and maintain a healthier lifestyle.