Abstract

http://ssrn.com/abstract=2165564
 


 



Aging and Financial Decision Making


Keith Jacks Gamble


DePaul University - Department of Finance

Patricia Boyle


Rush University - Rush University Medical Center

Lei Yu


Rush University

David Alan Bennett


Rush University - Rush University Medical Center

June 2014

Forthcoming in Management Science

Abstract:     
This study examines how cognitive changes associated with aging impact the financial decision making capability of older Americans. We find that a decrease in cognition is associated with a decrease in financial literacy. Decreases in episodic memory and visuospatial ability are associated with a decrease in numeracy, and a decrease in semantic memory is associated with a decrease in financial knowledge. A decrease in cognition also predicts a drop in self-confidence in general, but importantly, it is not associated with a drop in confidence in managing one's own finances. Participants experiencing decreases in cognition do show an increased likelihood of getting help with financial decisions; however, many participants experiencing significant drops in cognition still do not get help.

Number of Pages in PDF File: 23

Keywords: aging, cognitive decline, financial literacy, retirement

JEL Classification: G00, H31

Accepted Paper Series





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Date posted: October 22, 2012 ; Last revised: July 22, 2014

Suggested Citation

Gamble, Keith Jacks and Boyle, Patricia and Yu, Lei and Bennett, David Alan, Aging and Financial Decision Making (June 2014). Forthcoming in Management Science. Available at SSRN: http://ssrn.com/abstract=2165564 or http://dx.doi.org/10.2139/ssrn.2165564

Contact Information

Keith Jacks Gamble (Contact Author)
DePaul University - Department of Finance ( email )
1 East Jackson Blvd.
Chicago, IL 60604-2287
United States
Patricia Boyle
Rush University - Rush University Medical Center ( email )
Health Systems Management
1700 West Van Buren Street, TOB Suite 126B
Chicago, IL
United States
Lei Yu
Rush University ( email )
Chicago, IL
United States
David Alan Bennett
Rush University - Rush University Medical Center ( email )
Health Systems Management
1700 West Van Buren Street, TOB Suite 126B
Chicago, IL
United States
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