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Older U.S. investors may engage in more risky financial behaviors as they continue to age and face diminished financial knowledge, according to new research from the Financial Industry Regulatory Authority Investor Education Foundation, in collaboration with researchers from Duke University and Rush University Medical Center.

The study, ‘Does Overconfidence Increase Financial Risk Taking in Older Age?,” suggests that, among senior investors, overconfidence in one’s financial knowledge may contribute to risky financial behavior, FINRA said Thursday in announcing the research findings.

“Aligning older investors’ actual financial literacy levels with their confidence in their financial knowledge may help protect them from overly risky investments,” FINRA suggested.

However, the findings, released in recognition of September as Healthy Aging Month, also indicated that although adults who were more overconfident reported being more willing to take financial risks, those individuals were not more susceptible to scams or more likely to be victimized by fraud.

Participants in the study reported their level of financial risk tolerance when managing their own money, as well as other measures related to financial risk tolerance, including scam susceptibility and financial fraud victimization.

Financial literacy was lowest among the oldest adults in the study, and those individuals who were the most overconfident were more likely to take financial risks, according to FINRA Foundation.

“Financial risk tolerance was lower at the oldest ages in general, but age was not very strongly related to risk tolerance,” the study said, noting “age explained only about 1 percent of the variance in financial risk tolerance whereas overconfidence explained about 6 percent of the variance in risk taking.”

The “overconfidence effect is larger than the age effect but it is not a large effect,” the study said, adding: “The vast majority of individual differences in risk tolerance were unexplained by the variables we examined. Many other factors contribute to financial risk tolerance.” Those other factors included long-term financial experience, financial advice and financial stability, it said.

The results were also the same for aging investors with and without mild cognitive impairment, according to FINRA.

“Financial literacy levels among all Americans are alarmingly low, but among older investors, our research suggests that the challenges are even greater,” according to Gerri Walsh, FINRA Foundation president.

“This is because financial knowledge declines at older ages, but confidence in financial knowledge does not, and the resulting overconfidence can lead to unfortunate financial consequences,” she said in a statement, adding: “Senior investors manage a large share of our nation’s wealth, and risky decisions by aging investors can result in the loss or diminution of a lifetime of personal savings.”

For the study, researchers surveyed more than 1,200 adults ages 58 to 101 from the greater Chicago area about their financial decision-making, financial literacy and ratings of confidence in their financial knowledge, the study said.

“Across a wide spectrum of investment choices, there are many opportunities for senior investors to take excessive financial risk,” according to Walsh. However, one major problem is that, “as an individual ages, opportunities to recover lost wealth are limited, which reinforces the importance of identifying vulnerabilities in certain older adults and developing interventions to empower them to make wise financial decisions into the most advanced ages,” she said.

The study, which was conducted using data from the Rush Memory and Aging Project, was authored by Gregory Samanez-Larkin, associate professor, and undergraduate student Darby Heflin, Duke University; Lei Yu, associate professor, and Patricia Boyle, professor, Rush University Medical Center; and Gary Mottola, FINRA Foundation research director.