The Money Domain: Financial Security and the Science of Aging Well
- Marie-Chantal Ross
- Oct 19
- 4 min read
Key Stats at a Glance
9 years: Life-expectancy gap between poorest and wealthiest older adults³
80 %: U.S. older-adult households struggling or at risk¹
22 %: Canadians 50+ living in material deprivation²
1 % per year: Average decline in financial literacy after 60⁶
40 %: Middle-income workers at risk of poverty in retirement¹⁰
Why Money Matters as We Age
Money can’t buy happiness, but it does buy time, safety, and peace of mind. Financial security determines where we live, what care we receive, how long we live, and how freely we participate in life.
Across North America, millions of older adults are entering retirement unprepared. In the U.S., nearly 80 percent of older households are already struggling or at risk of hardship.¹ In Canada, one in five people over fifty cannot afford basic essentials like dental care or a $500 emergency expense.²
Low-income older adults in the United States die, on average, nine years earlier than their wealthier peers.³ Financial wellbeing, it turns out, is one of the most powerful predictors of longevity.
“Poverty steals almost a decade of life.”— National Council on Aging, 2025
The Hidden Cost of Getting Older
Traditional poverty measures underestimate the real strain of aging. Canada’s Material Deprivation Index looks not at income but at access to necessities, heating, clothing, social participation, and reveals far higher poverty rates than official statistics.²In the U.S., the Elder Index paints the same picture: nearly half of adults over sixty cannot meet local living costs, even when they’re above the poverty line.¹
Gender, race, and identity deepen these divides. Older women earn less in retirement and experience nearly twice the poverty rate of men.⁴ Black and Hispanic seniors face substantially higher economic insecurity.¹ LGBTQIA+ elders and those over eighty are especially vulnerable after outliving savings or facing lifetime discrimination.⁵
When the Mind Meets Money
Financial decision-making is not just about numbers, it’s about the brain.Studies show that financial literacy declines by about one percent per year after age sixty, even among educated adults.⁶ Yet confidence in one’s financial skills stays the same or even increases.⁷
This mismatch creates risk: declining cognitive abilities combined with high confidence make older adults more susceptible to poor decisions and fraud. Memory, reasoning, and numeracy all play a role.⁷
“Confidence rises as accuracy falls.” Finke, Howe, and Huston, 2015
Even well-intentioned education can backfire. After a short finance course, older Italians didn’t perform better on financial questions, but their confidence shot up.⁸ Real financial health requires ongoing support, not one-time lessons.
Safety Nets and Shortfalls
Social Security and the Canada Pension Plan remain lifelines, but neither was designed to shoulder retirement alone. Each $1,000 increase in Social Security benefits reduces poverty rates by up to three points,⁹ yet many older adults rely on it as their only income source.
Fewer employers now offer pensions, and personal savings often fall short. Roughly 40 percent of middle-income workers are on track to fall into poverty or near-poverty in retirement.¹⁰
Meanwhile, financial-education programs exist in abundance, but few track outcomes. A 2024 U.S. audit found that only one of twenty-four programs for older adults showed measurable results.¹¹
The Biology of Inequality
Financial insecurity does more than limit options, it changes the body.Chronic stress from money worries raises inflammation and weakens immunity. In contrast, older adults with stable finances live longer, experience less depression, and maintain independence far later in life.³ ¹²
Economists now frame financial wellbeing as preventive medicine.The McKinsey Health Institute estimates that every $1 spent on healthy-aging initiatives, including financial stability, returns $3 in economic and health benefits.¹² Financial health is personal, emotional, and biological all at once.
Looking Ahead
The money domain of aging isn’t just about wealth—it’s about freedom from fear. Financial security gives older adults the power to make choices, stay connected, and live with dignity.
When we treat financial wellbeing as central to health—on par with body, mind, and community—we create the conditions for longer, fuller lives for everyone.
References (Chicago Style)
National Council on Aging. Get the Facts on Economic Security for Seniors. 2024.
Iciaszczyk, P., et al. “Ageing in Canada Survey.” National Institute on Ageing, 2024.
National Council on Aging. Low-Income Older Adults Die 9 Years Earlier than Those with Greatest Wealth. 2025.
Thornton, M., and K. Bowers. “Poverty in Older Adulthood: A Health and Social Crisis.” Online Journal of Issues in Nursing 29, no. 1 (2024).
U.S. Congressional Research Service. Poverty Among the Population Aged 65 and Older. 2024.
Finke, M. S., J. S. Howe, and S. J. Huston. “Old Age and the Decline in Financial Literacy.” Management Science 61, no. 11 (2015): 2603–2610.
Gamble, K. J., P. A. Boyle, L. Yu, and D. A. Bennett. “Aging and Financial Decision Making.” Management Science 61, no. 11 (2015): 2603–2610.
Lippi, A., and M. Santoni. “Promoting Financial Literacy among the Elderly: Consequences on Confidence.” Journal of Economic Psychology 87 (2021): 102419.
Engelhardt, G. V., and J. Gruber. “Social Security and the Evolution of Elderly Poverty.” National Bureau of Economic Research Working Paper 10466, 2004.
Radpour, S., E. Conway, and T. Ghilarducci. A Universal Retirement Plan Can Reduce Inequality and Prevent Downward Mobility. Schwartz Center for Economic Policy Analysis, The New School, 2022.
U.S. Government Accountability Office. Financial Literacy: Better Outcome Reporting Could Facilitate Oversight of Programs for Older Adults and People with Disabilities (GAO-24-106381). 2024.
McKinsey Health Institute. The Economic Case for Investing in Healthy Aging: Lessons from the United States. 2025.
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