Assets and Longitudinal Life Satisfaction Patterns Among Retired Older Adults in Korea: Using Latent Class Analysis and Multi-Nominal Regression Analysis

Objectives: Previous research confirms that rich older adults are more likely to be satisfied with their lives. Researchers have generally accepted income as an indicator of economic status. However, post-retirement older adults are more likely to face income reductions and recent research now emphasizes assets as economic indicators affecting older adults' life. Building upon previous studies, this study attempts to identify long-term patterns of life satisfaction among older adults who have retired. Examining six-wave panel data from Korea, we use latent class analysis (LCA) to identify latent classes of older adult life satisfaction. In addition, using multinomial regression analyses, we assess how assets and debts influence the latent classes of life satisfaction among older adults. By testing how assets affect life satisfaction patterns among older adults, we expect that this study will enhance scholarly understanding of long-term patterns of life satisfaction within elderly populations.

Method: This study uses 6-wave panel data from the Korean Retirement and Income Study (KReIS). The independent variables include real assets, financial assets, other assets, and debts. Life satisfaction is measured by a 5-point Likert-type indicator of overall life satisfaction. We conduct latent class analysis (LCA) to identify the longitudinal classification of life satisfaction of the sample. After identifying latent classes, we examine the extent to which the measures of assets are related to latent classes of life satisfaction. For this purpose, we employ multinomial logistic regression analyses.

Results: LCA identifies three classes of life satisfaction across the six waves; high, middle, and low life satisfaction classes. This study also finds that older adults with more financial and real assets are likely to have higher life satisfaction throughout the study periods. In addition, total debts are also a significant factor of life satisfaction classes in that those with more debts are less likely to be happy.

Discussion: This study reports that assets matter for longitudinal patterns of life satisfaction of Korean older adults. Based on the results, the findings suggest that asset-building programs and financial education programs will help older adults prepare for later life.