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Perceived Financial Vulnerability, Wealth, and Wealth Change: The Health and Retirement Study
Madison Maynard1, Emily V Flores2,3, Daniel Paulson1
1Department of Psychology, University of Central Florida, Orlando, Florida, USA.
Financial loss increases perceived financial vulnerability in older adults. The Perceived Financial Vulnerability (PFV) scale effectively measures this, highlighting the need for comprehensive financial assessments.
Area of Science:
- Gerontology
- Behavioral Economics
- Public Health
Background:
- The 6-item Perceived Financial Vulnerability (PFV) scale measures financial awareness and psychological vulnerability.
- Prior research linked PFV to wealth, demographics, and health in the Health and Retirement Study (HRS).
Purpose of the Study:
- To investigate the relationship between wealth, changes in wealth, and perceived financial vulnerability.
- To assess the predictive utility of wealth dynamics on financial vulnerability in older adults.
Main Methods:
- Analysis of HRS data from 1,056 respondents.
- Stratification of baseline assets (2016) and wealth changes (2016-2018) into deciles.
- Multiple linear regression models to assess the influence of demographics, baseline wealth, and wealth change on PFV in 2018.
Main Results:
- Both wealth change and baseline wealth were significantly associated with PFV.
- Wealth loss, independent of baseline wealth, linearly predicted increased perceived financial vulnerability.
Conclusions:
- The study validates the utility of the PFV scale.
- Findings emphasize integrating financial and demographic data for a holistic view of financial well-being.
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