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Board of Governors of the Federal Reserve System
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Insights into the Financial Experiences of Older Adults: A Forum Briefing Paper


The U.S. population is growing in terms of both size and age. By 2060, Census data projections indicate the population of individuals age 65 and older will increase from 47 million to more than 92 million. Put another way, more than one in every five individuals in the U.S. will be over the age of 65 by 2060, up from one in seven (15 percent) in 2015. Moreover, the number of people age 85 and older is expected nearly to triple to 18 million over the same period.3

In this report, the term "older adults" broadly references those age 40 and older, but this captures a wide range of ages and represents multiple generations of individuals with considerable variation in financial circumstances. While the Federal Reserve Board's Survey of Consumer Finances (SCF) data show that older adults, as a group, hold a greater share of household net worth than younger cohorts, many suffered substantial or potentially irrecoverable financial losses as a result of falling stock and house prices during the financial crisis.4 Significant loss of income or wealth can be destabilizing for any household, but the consequences are particularly acute for a household without the capacity to work or without the time to recoup losses. These factors may pose unique financial challenges for older adults seeking to rebuild lost wealth in times of economic uncertainty.

In addition to coping with the stresses of a more uncertain economic environment, all consumers have to navigate an increasingly complex financial marketplace. Some financial products have become more complicated, methods of purchasing and paying more varied, and the impact of technology more evident. This, together with converging demographic trends and the recent financial crisis, raises questions about the financial stability of older adults in the years ahead. To explore these issues further, the Federal Reserve Board held a series of meetings in 2012 and early 2013 with experts on aging issues to gain insight into matters affecting the financial well-being of older adults. These discussions helped identify gaps in knowledge about the financial choices older adults make, and informed the decision to conduct the Older Adult Survey, as well as to place the survey results in context.

The Older Adult Survey is an initial inquiry into the financial lives of older adults. The Federal Reserve Board conducted the survey in December 2012 using an Internet panel of respondents age 40 and above. The survey focuses on, among other things, methods of banking and bill paying, credit card use and payment, and management of debt for mortgages and student loans. The survey also explores where people turn for help or advice when making these financial decisions.

This report summarizes results from the Older Adult Survey regarding respondents' use of financial products and services, financial decisionmaking, and financial stress and well-being. Some findings are confirmatory, others provide insights, and still others raise questions that suggest areas for further investigation. Where appropriate, survey results are compared to those found in the SCF or other data sets. Other literature and research also are used to supplement the findings from the survey.

In this report, the term "older adults" is used to refer to the full sample of respondents age 40 and above; adults in their 40s and 50s also are referred to as "middle-aged"; 60- to 69-year-olds are referred to as "those in their 60s"; and those 70-years-old and above are referred to as "oldest adults." All older adults are sometimes referred to by their specific decade (e.g., "those in their 50s").

About the Older Adult Survey

The Older Adult Survey was conducted using the RAND American Life Panel (ALP). The ALP is an Internet panel that includes more than 5,000 people age 18 and older who have agreed to participate in periodic online surveys. At the time the survey was conducted, more than 300 surveys covering a range of topics had been fielded on the ALP since January 2006. ALP respondents also have answered a core set of demographic questions, as well as a battery of questions from the University of Michigan's longitudinal Health and Retirement Study (HRS), a widely used data source on the well-being of older adults. Prior to being recruited for the ALP, most panelists already had access to the Internet. However, for those who did not, RAND provided Internet access, and a computer if needed, that can be used for responding to surveys as well as for personal use. That said, none of the respondents to the Older Adult Survey required RAND to provide them with Internet access or a computer.

As with any survey method, there are limitations to the use of an online survey that may affect the degree to which the survey results may be interpreted as truly representative of the national population of older adults. Internet panels may not accurately represent the general population and can be subject to biases resulting from undercoverage or nonresponse and, in this case, underrepresentation of older adults who are the financially most vulnerable or those that are physically or cognitively impaired. Not everyone in the United States has access to the Internet and there are significant demographic (income, education, age) and geographic (suburban and rural) differences between those who do have access and those who do not, in addition to variation in skill levels needed to complete an Internet survey.5, 6

While still a concern, some of these differences in Internet use have been diminishing. Internet use among older adults has increased rapidly in recent years. A survey of Internet use by the Pew Research Center found that, as of April 2012, more than one-half (53 percent) of American adults age 65 and older use the Internet or e-mail.7 This usage rate is up from 38 percent in 2008, with most growth occurring since 2011. In the next oldest age group, age 50 to 64, more than three-quarters (77 percent) use the Internet.8 Usage rates for age groups younger than 50 remain higher at 90 percent and above. Furthermore, while some groups may be underrepresented in the survey sample relative to their share of the general population, this can be mitigated with sample weighting, as RAND does. See Appendix A for more information about the representativeness of surveys conducted with an Internet panel and the sample and weighting scheme for this survey.

For an exploratory effort, such as the Older Adult Survey, an online panel provides several advantages, provided the limitations discussed earlier are taken into account. This method may allow for the collection of more detailed information than a telephone survey, while also being faster and lower cost. Another advantage of using the RAND ALP, specifically, is that the data collected in previous surveys from the same respondents can be merged with the data collected from this survey. These supplemental data cover issues such as: confidence in decisionmaking ability, life satisfaction, cognition, work status of retirees, retirement expectations of workers, and data on major life events such as death of a spouse or partner, divorce, and illness.

The Older Adult Survey utilized a subset of the ALP drawn from panelists age 40 and above. The survey was fielded online over a three-week period in December 2012. An e-mail was sent to a sample of 2,328 panelists age 40 to 94; a total of 1,821 individuals completed the survey, for a completion rate of 78 percent. The final survey consisted of 62 questions, but individual respondents may have received fewer questions, answering only those that were applicable to their financial situation. Median response time for those who completed the survey was 10 minutes. See Appendix B for details on survey questions and responses.

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3. U.S. Census Bureau (2012).  Return to text

4. Boshara and Emmons (2013), pp. 6-7. Younger households hold a greater share of their wealth in housing and suffered greater losses in net worth, in percentage terms, than older adults.   Return to text

5. See Pew Research Center for the People & the Press, Internet Surveys. Available online at  Leaving the BoardReturn to text

6. See Pew Internet & American Life Project, Trend Data (Adults), Demographics of internet users. Available online at  Leaving the BoardReturn to text

7. Zickuhr and Madden (2012), p. 4.  Return to text

8. Zickuhr and Madden (2012), p. 5.  Return to text

Last update: July 30, 2013

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