Good Retirement Savings, Health Habits Connected

July 7, 2014 ( – Researchers at St. Louis, Missouri’s Washington University have found a connection between good retirement savings habits and good health habits.

In “Healthy, Wealthy, and Wise: Retirement Planning Predicts Employee Health Improvements,” Lamar Pierce, associate professor of strategy at the university’s Olin Business School, and doctoral candidate Timothy Gubler find an employee’s decision to contribute to a 401(k) retirement plan predicted whether he or she would act to correct poor physical health indicators that were revealed during an employer-sponsored health examination.

“We find that existing retirement contribution patterns and future health improvements are highly correlated,” say Pierce and Gubler. “Those who save for the future by contributing to a 401(k) improved abnormal health test results and poor health behaviors approximately 27% more than non-contributors.”

The research findings show that insufficient retirement funds and chronic health problems are at least partially driven by time discounting, a common cognitive bias that leads us to prefer smaller immediate rewards over larger future rewards.

Using personnel and health data from eight industrial laundry locations in multiple states, Gubler and Pierce were able to look at employees who contributed to their company 401(k) plans, and those who did not, and compare them to the extent they changed their behavior to address a health risk.

Employees were given an initial health screening and were told of the results, which were also sent to their personal physicians. Screening results showed 97% of the employees had at least one abnormal blood test, and 25% had at least one severely abnormal finding. The employees were also given information about risky health behaviors and anticipated future health risks.

Pierce and Gubler then followed the employees for two years to see how they attempted to improve their health, and if any changes they made were tied to financial planning habits. After controlling for differences in initial health, demographics, and job type, the researchers found a connection between retirement savings and health improvement behaviors.

The employees studied, who had previously chosen to save for the future through 401(k) contributions, improved their health significantly more than non-contributors, showing improvements on tests for blood glucose and cholesterol. Contributors showed these positive changes despite the fact that there were few health differences between contributors and non-contributors prior to program implementation, according to the research.

While they could not measure time discounting directly as the main underlying factor driving both health-related behavior and financial planning, Gubler and Pierce point out that the results are not accounted for by other factors, such as how conscientious the employees were, whether they took professional advice, the extent of their financial need, or their life expectancy.

“Our analysis suggests that the same underlying psychological factors that are linked to retirement planning also predict health-improvement behaviors,” the researchers conclude.

Information about how to obtain a report of research results can be found here.