It’s been a long-held belief that as a person ages, his or her decision-making ability declines. Therefore, selling complex financial products like annuities to a senior is a risky endeavor.
However, a new study by the MetLife Mature Market Institute and the Center for BrainHealth at the University of Texas at Dallas asserts that age alone is not a determining factor in whether an elder can make a sound financial decision.
Researchers interviewed 72 men and women in their 50s, 60s and 70s for the study, “Healthy Brain, Healthy Decisions: The MetLife Study of Decision-Making Potential.” Countering conventional wisdom that as one gets older cognitive functions decline, investigators found that healthy older adults were still able to make good decisions about their finances. Rather than age being a curb on mental capacity, the study found that more life experience and accumulated knowledge actually enhanced decision-making and reasoning ability.
If a senior’s cognitive abilities do deteriorate, it is more likely due to an underlying, individual disorder, such as early dementia or other medical condition.
“Rather than attributing impaired decision-making to age alone, approaches that assess an individual’s strategic learning ability and cognitive function can improve our understanding of decision-making capacity at all ages and between genders,” said Sandra Timmermann, Ed.D., director of the MetLife Mature Market Institute, in a statement.