How Childhood Hardship Can Cut Retirement Wealth by 50%

Enduring childhood abuse or a parental divorce often has negative consequences for a person’s wealth later in life, says a recent report from the Center for Retirement Research (CRR) at Boston College. And that can have a big impact on retirement security.

In the December 2025 study, CRR researchers found that facing adverse childhood experiences (ACEs)—like emotional neglect, household mental illness, or alcoholism—resulted in people aged 52 to 60 having a net worth that was substantially lower than those who did not.

Analyzing data from a longitudinal survey spanning from 1979 to 2018 of more than 12,500 people, the researchers found that the median net wealth of people who did not have such adverse experiences during childhood was $110,000, while those who did had a net worth that was 44% to 77% lower.

The researchers controlled for both parental income and education.

“A measure of net worth near retirement is an interesting measure because it captures a lot of someone’s life, like how much someone was able to work [and] how much they could save while they’re working,” said Geoffrey Sanzenbacher, co-author of the report and an economics professor at Boston College.

He points out that this group might have a smaller amount of wealth later in life because of a variety of factors, like higher unemployment and divorce rates and lower marriage rates.

“People who have these experiences end up being less educated, having lower scores on cognitive tests, working less often, and earning less when they do work. All those things contribute to a lower net worth,” Sanzenbacher said. “They also end up being married less often and [are] more likely to be divorced.”

So what can people do to overcome this shortfall in savings later in life?

Here are three steps to consider:

• Make catch-up contributions: Those age 50 or older are eligible to make catch-up contributions to their retirement accounts. In 2026, older workers can make 401(k) catch-up contributions worth up to $8,000, while workers ages 60-63 can make even larger contributions—up to $11,250.
• Evaluate the likelihood you’ll stay in your current job: Sanzenbacher suggests that people in their 50s think carefully about whether to stay in their present role until retirement. If not, they should consider switching jobs and finding a role that’s a better fit for them later in life.
• Delay Social Security: While you can collect Social Security as early as age 62, you can receive much larger benefits if you wait until full retirement age (FRA)—which is 67 for those born in 1960 or later. And you’ll collect even larger monthly checks if you wait beyond FRA. For every year after FRA that you delay collecting, up to age 70, your benefits increase an additional 8%.

Sanzenbacher also notes the importance of programs like Social Security and SNAP for those impacted by adverse childhood experiences.

Since Social Security is progressive—meaning lower-income workers have a greater portion of their preretirement earnings replaced by benefits compared with higher earners—this group benefits more from it.

“Social Security has universal coverage and a progressive benefit formula if you’re a lower earner. That’s going to go a long way if you don’t have a 401(k) or you have a low-paying job,” said Sanzenbacher.