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Financial Security Framework

What are the key factors that affect a person's financial security in later life? A review of supporting research on financial security in later life suggests that there are multiple and complex factors that interact to influence financial security. One way to understand these factors is from a risk perspective, or identifying the factors that work together to increase the risk of being financially insecure within the family, outside family and cumulative factors.

Within the Family:

  • Inadequate planning for longer life expectancies
    • unclear goals
    • unidentified needs
  • Unprepared for later life events
    • changing work patterns, including retirement
    • changes in family structure, roles, responsibilities
    • changes in health and independence
    • death
    • aging parent/in-laws
  • Indicators
    • lack of having identified future income needs
    • no income sources beyond Social Security
    • low personal savings rates
    • low level of accumulated assets
    • no health insurance coverage beyond Medicare
    • no will or transfer plans for resources
    • fear and worry about outliving income/resources
    • no intergenerational communication
  • Unsolved conflicts among family decision makers
    • Roles
    • Values, attitudes, goals
    • Meaning of financial security
  • Low financial literacy (knowledge and skills)
    • Saving and investing
    • Health and long term care
  • Low self-efficacy/confidence in ability to plan, prepare, protect

Outside Family:

  • Inadequate Professional Advice
    • Financial planners
    • Elder law attorneys
  • Lack of choices/options within private and public sectors
    • lack of access to pensions/retirement saving accounts
  • Complex and changing options (public and private sectors)
  • Lack of information/misinformation
  • Ambiguity in social norms
    • Who's responsible for retirement, later life, long term care?

Cumulative Factors (Individual and Societal levels): 

  • Gender
  • Minorities
  • Family history
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