Those Who Are Wealthy Are Healthy

July 17, 2014
Laura Joszt

A common cognitive bias has led to a high correlation between existing retirement contribution patterns and future health improvements, according to a new study.

The decision to contribute to a 401(k) plan can predict whether or not an individual will act to correct his or her poor health, according to a new study from researchers at the Olin Business School at Washington University in St. Louis.

Lamar Pierce, PhD, and doctoral candidate Timothy Gubler wrote in their paper “Healthy, Wealthy, and Wise: Retirement Planning Predicts Employee Health Improvements” published in Psychological Science that there is a correlation between existing retirement contribution patterns and future health improvements.

“Those who save for the future by contributing to a 401(k) improved abnormal health test results and poor health behaviors approximately 27 percent more than non-contributors,” the authors wrote.

Pierce and Gubler attributed the common cognitive bias “time discounting,” which leads us to prefer smaller immediate rewards over larger future rewards to the correlation between physical and financial health.

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

The researchers used personnel and health data from 8 industrial laundry locations in multiple states to see whether or not an employee contributed to the company 401(k) plan and compare it to if the employee changed their behavior to correct a poor physical health indicator as revealed by a health examination.

First, employees were given an initial health screening and told the results, and then they were sent to their personal physicians. According to the results, 97% of employees had at least one abnormal blood test and 25% had at least one severely abnormal finding. The employees were given information on risky health behaviors and anticipated future health risks.

After following the workers for 2 years, the researchers found participants who chose to save through 401(k) contributions improved their health significantly more than non-contributors. Prior to program implementation there were few health differences between contributors and non-contributors.