Healthy, wealthy, and wise: retirement planning predicts employee health improvements

Exploring the first steps of retirement engagement: a conceptual model and field evidence

Purpose

The authors develop and validate a conceptual model, the retirement engagement model (REM), to understand the relationships between behavioral engagement (retirement information search), cognitive factors and engagement (e.g. beliefs and financial knowledge), emotional engagement (e.g. anxiety), and socio-demographic factors. Approach: The authors derive the REM through a three-step procedure: (1) an extensive literature review, (2) interactive feedback sessions with experts to confirm the model's academic and managerial relevance, and (3) an empirical test of the REM with field data (N = 583). The authors use a partial least squares (PLS) structural equation model and examine heterogeneity through a finite mixture model.

Design/methodology/approach

Around the globe, people are insufficiently engaged with retirement planning. The customer engagement literature offers rich insights into antecedents, outcomes, and barriers to engagement. However, customer engagement literature lacks insights into cognitive, emotional and behavioral factors that drive engagement in retirement planning, a utilitarian service context, which is important for financial well-being.

Findings

Beliefs such as perceived susceptibility, severity, benefits, barriers, and self-efficacy, together with trust and retirement anxiety, explain people's search for pension information. These factors can be used to define three clear, actionable segments of consumers.

Originality/value

The findings advance the customer engagement and transformative service research literature by generating insights on engagement with retirement planning, a utilitarian rather than hedonic service context that is especially relevant for financial well-being. The findings inform managerial practice and emphasize the relevance of including cognitive and emotional engagement factors that trigger behavioral engagement. The REM can help to improve pension communication. For example, the results indicate that marketers should stress the benefits of, rather than the barriers to, acquiring information.

The role of financial conditions for physical and mental health. Evidence from a longitudinal survey and insurance claims data

BACKGROUND

Both theory and empirical evidence suggest that financial conditions are influential for mental health and might contribute to physical health outcomes.

METHODS

Using longitudinal survey data and health insurance claims data from 1209 employees in a large U.S. health insurance company, we examined temporal associations between measures of financial safety, financial capability, financial distress, their summary index (financial security) and six subsequently measured mental and physical health outcomes.

RESULTS

We found that financial safety and financial capability were positively associated, while financial distress was negatively associated, with subsequent self-reported measures of physical and mental health, even after controlling for these health measures at baseline and other confounders. Additionally, financial conditions were associated with reduced risk of depression based on health insurance claims data. Financial safety was also associated with anxiety.

CONCLUSIONS

Policy-makers might consider the introduction of more effective measures for ensuring favorable financial conditions as an important contributor to better population health. Furthermore, policy could encourage teaching adequate financial management techniques and the importance of understanding of long-term consequences of financial decisions, as those might be pivotal for health outcomes.

Health and Wealth: The Importance for Lifestyle Medicine

Many people spend years dreaming about their retirement. Unfortunately, today's workers will likely work longer, suffer greater economic uncertainty, and might have poorer health status compared with retirees in previous generations. Preserving good health during the working years is associated with a more consistent employment record, greater financial resources, and reduced risk of disease. Making smart financial decisions as a younger adult also translates to improved finances in retirement. While many people are aware of these relationships, many continue to make poor health choices. Employers and lifestyle medicine professionals can both work to improve financial well-being in retirement. Employers can offer effective worksite financial wellness programs and promote participation in retirement savings programs. Physicians and other health providers can foster healthy behaviors, encourage preventive services compliance, and help adults foster overall financial and health well-being. Adopting a healthy lifestyle as early as possible would increase the likelihood that today's workers will enjoy financial security in retirement.

Health & Wealth: is weight loss success related to monetary savings in U.S. adults of low-income? Findings from a National Study

BACKGROUND

Many individuals aspire to attain various goals in life, such as committing to a healthful diet to slim down or saving for retirement to enhance future welfare. While these behaviors (weight loss and saving) share the common denominator of self-regulation, it is unclear whether success in one domain is related to the other. Therefore, we examined the relationship between long term weight loss (LTWL) success and monetary savings among U.S. adults who at one point in life diverged from normal weight status.

METHODS

Data on 1994 adults with a maximum BMI ≥ 25 kg/m² and with an annual household income equal or less than 200% poverty level. Data were derived from a U.S. population-based study (NHANES). The independent variable was LTWL success (loss maintained for at least 1 year), which was operationalized as < 10% (reference group), 10.00-19.99%, and ≥ 20.00%. The dependent variable was monetary savings (e.g., 401 K), defined as a 3-category ordinal variable. We employed ordered logistic regression to estimate the relationship between LTWL success and increased odds for higher overall savings.

RESULTS

Multivariable analysis revealed that adjusting for income, education and other covariates, being in the highest LTWL category (≥20.00%) significantly reduced the likelihood of monetary savings in comparison to the reference group (OR = 0.55, 95%CI = 0.34-0.91). This relationship was not observed in the lower LTWL category (10.00-19.99%).

CONCLUSIONS

Adults who in the past were overweight or obese and who presently exhibit high levels of LTWL, were markedly less successful when it came to their finances. This might stem from significant cognitive-affective resources exerted during the weight loss process coupled with a paucity of financial resources which impede financial decision making. This supposition, however, warrants future research.

Credit scores, cardiovascular disease risk, and human capital

Credit scores are the most widely used instruments to assess whether or not a person is a financial risk. Credit scoring has been so successful that it has expanded beyond lending and into our everyday lives, even to inform how insurers evaluate our health. The pervasive application of credit scoring has outpaced knowledge about why credit scores are such useful indicators of individual behavior. Here we test if the same factors that lead to poor credit scores also lead to poor health. Following the Dunedin (New Zealand) Longitudinal Study cohort of 1,037 study members, we examined the association between credit scores and cardiovascular disease risk and the underlying factors that account for this association. We find that credit scores are negatively correlated with cardiovascular disease risk. Variation in household income was not sufficient to account for this association. Rather, individual differences in human capital factors—educational attainment, cognitive ability, and self-control—predicted both credit scores and cardiovascular disease risk and accounted for ∼45% of the correlation between credit scores and cardiovascular disease risk. Tracing human capital factors back to their childhood antecedents revealed that the characteristic attitudes, behaviors, and competencies children develop in their first decade of life account for a significant portion (∼22%) of the link between credit scores and cardiovascular disease risk at midlife. We discuss the implications of these findings for policy debates about data privacy, financial literacy, and early childhood interventions.