Aging in America: An Examination of Financial and Health Decision Making among Older Adults

Abstract

The US population is aging, and aging is associated with cognitive, contextual, psychosocial, and other changes that can impact people's ability to make effective decisions. Ineffective decision making, particularly related to finances and healthcare, can have significant and irreversible effects on wellbeing. Better understanding the relationships between aging and decision making is needed to identify ways to maintain or even enhance decision making ability as we grow older. This chapter reviews research that examines how aging impacts decision making and susceptibility to financial fraud, including the role that financial literacy plays, and discusses how findings from this research inform policies aimed at protecting older adults from the problems that can arise from suboptimal decisions.

Keywords: Aging, Cognition, Financial Decision Making, Financial and Health Literacy, Financial Fraud

JEL Classification: G41, G53, G11, G18, I12