Financial Well-Being in Older Adults: A Machine Learning Analysis of 47 Potential Predictors

Area of Science:

• Gerontology
• Psychology
• Economics

Background:

• Financial well-being is crucial for older adults' quality of life.
• Predictors of financial well-being are complex, involving multiple domains.
• Understanding these predictors can inform interventions for aging populations.

Purpose of the Study:

• To identify key predictors of financial well-being in older adults.
• To assess the relative importance of psychosocial, demographic, and lifestyle factors.
• To provide a data-driven understanding of financial well-being determinants.

Main Methods:

• Utilized data from the Health and Retirement Study.
• Employed Random Forest analysis to evaluate 47 potential predictors.
• Focused on subjective financial well-being as the outcome variable.

Main Results:

• Psychological variables, including chronic stress, life satisfaction, perceived control, and optimism, were significant predictors.
• Psychological factors demonstrated stronger predictive power than demographic indicators.
• Education emerged as the most influential demographic predictor.

Conclusions:

• Financial well-being in older adults is significantly influenced by psychological resources.
• Individual agency, optimism, and life satisfaction play a vital role.
• Financial well-being is not solely determined by economic status or demographics.