Financial Leverage and Life Satisfaction of U.S. Baby Boomer Retirees: An Empirical Study

Abstract

This study examined the association between financial leverage and life satisfaction for retired baby boomers in the United States. Financial planning factors modeled included mortgage and non-mortgage debt, wealth, income, financial satisfaction, and financial control. This empirical study used a sample of 984 retirees aged 50-70 from the 2016 Health and Retirement Study. Life-cycle hypothesis was employed to explain and model life satisfaction. Ordinary least squares regression produced an adjusted R-squared of 41.31%. Partial support for the hypotheses was demonstrated. Non-mortgage debt was found to be negatively associated with life satisfaction, indicating lack of utility for this type of debt. Mortgage debt, on the other hand, was not negatively or positively associated with life satisfaction. Significant variables contributing to life satisfaction included financial satisfaction, physical health, social control, life expectations, and marital status. The results of this modeling would appear to indicate that outstanding non-mortgage debt has a greater negative impact on life satisfaction than mortgage debt.