Posted on 15 July 2011
By Mark Miller
A growing body of research suggests that our ability to make sound financial decisions declines sharply with age.
Roughly half of adults in their 80s suffer from dementia or cognitive decline that impacts financial management skills, according to David Laibson, an economics professor at Harvard University and co-author of a research report with three other economic and financial experts on aging and reasoning ability.
Other researchers have documented characteristics of poor decision-making in the elderly that leave them vulnerable to the marketing tactics of fraudulent and abusive financial services. A research team at the University of Iowa points toward problems with complex decision-making in some older adults who haven’t been diagnosed with any specific neurological or psychiatric diseases.
How can you make a plan to protect yourself–or an aging parent? Learn more in my column at Morningstar.