Almost half of Americans die with very few financial assets

Nearly half of Americans die with few financial assets remaining. (Photo: MGNOnline)

A new study brings some depressing news—nearly half of Americans die with “virtually no financial assets.”

The study—which The Huffington Post and The Washington Post picked up—comes from MIT, Dartmouth and Harvard economics, who found that 46 percent of people die with less than $10,000 in financial assets.

And 19 percent die with zero financial assets.

Many people don’t have any housing wealth and rely on Social Security for support.

And even though they may have been prepared for retirement, because their income in later years wasn’t significantly lower than income they brought in in their late 50s, low asset levels make it difficult for some to pay for “financial shocks or to pay for entertainment, travel or other activities.”

But before panic sets in, the news isn’t all bad.

“This is not good, but I think this makes it sound worse than it may be,” Jayme O’Donnell, partner at Chattanooga’s Evergreen Advisors, who also hosts a radio show called “Let’s Talk Money," said.

O’Donnell pointed out that the majority of people who are in their 80s and 90s aren’t going to be traveling very much.

“The theory is that [the older you get] the less you’re going to need from an income standpoint simply because you’re not doing as many auxiliary kinds of things," she said.

Older Americans may not own homes because they move in with family members or into senior retirement communities or nursing homes.

A 2010 NBC News article highlighted the trend of retirees moving in with their children.

O’Donnell also said that some people position themselves purposely, using legal planning strategies, to have few assets and income toward the end of life so that they can qualify for Medicaid.

But upcoming generations may be worse off.

Traditionally, retirement is a “three-legged stool” of savings, pensions and Social Security, O’Donnell said.

But that won’t likely be the case for millennials, so saving is more important than ever.

The classic idea is to save 10 percent from each paycheck. But O’Donnell said even saving $10 a week is better than nothing.

“For younger generations—we don’t have pensions,” she said. “Ninety-nine percent of us aren’t going to have pensions. It doesn’t take long to look at the financial situation of Social Security and be concerned about that. The earlier we start saving, the better off we are going to be. We are essentially sitting on what is at best a two-legged stool. In reality, it’s far more of a one-legged stool.”