Friendships that money can buy: Financial security protects health in retirement by enabling social connectedness

Abstract

Background: Research on the health and wellbeing of retirees has tended to focus on financial security and financial planning. However, we suggest that one reason why financial security is important for retirees is that it enables social connectedness, which is critical for healthy ageing. Methods: This paper tests this hypothesis cross-sectionally (N = 3109) and longitudinally (N = 404) using a population-weighted mixed effects mediation model in two nationally representative samples of Australian retirees. Results: Analyses provide robust support for our model. Subjective financial security predicted retiree health cross-sectionally and longitudinally. Social connectedness also consistently predicted mental health and physical health, on average four times more strongly than financial security. Furthermore, social connectedness partially accounted for the protective effect of subjective financial security. Conclusions: We discuss the implications of these findings for public health, with a particular emphasis on how social connectedness can be better supported for people transitioning to retirement.