Financial Satisfaction in Old Age: A Satisfaction Paradox or a Result of Accumulated Wealth?
Aging research NOVA-Norwegian Social Research Oslo, NORWAY
Prior research consistently has found that older adults, despite low incomes, are more financially satisfied than younger adults. This "satisfaction paradox" is typically attributed to elders´ supposed psychological accommodation to poor financial circumstances. We advance a different explanation, one that focuses on substantial age differences in wealth and liabilities. Data are from the first wave of the Norwegian NorLAG study (n=4169). Findings support the hypothesis that an examination of a wider range of economic variables shows that material circumstances are more important to the financial satisfaction of the elderly than previously believed. A considerable part of the higher financial satisfaction with increasing age can thus be explained by greater assets and less debt among the aged. Nonetheless, assets and debt do not mediate this relationship at lower incomes, because older people with little income have very little accumulated wealth. As older people with little income and wealth have a much stronger tendency to be financially satisfied than their younger, equally poor counterparts, an "aging paradox" still remains in this field.