Financially literate seniors are less likely to develop Alzheimer’s dementia than elderly people who are not financially literate, according to a new study released by the Financial Industry Regulatory Authority Investor Education Foundation and researchers from Rush University Medical Center.
The study, Confidence in Financial Literacy and Cognitive Health in Older Persons, found that confidence in financial knowledge is associated with a decreased risk of Alzheimer’s dementia among older persons, while under-confidence suggests a greater risk of developing Alzheimer’s dementia and experiencing a faster cognitive decline.
“While it is not completely clear why this relationship exists, it could be that confident people are motivated to engage with the world and actively seek to acquire new information,” the report said.
Also, “in the face of distraction and setbacks, confident people are more persistent and tend to exhibit greater effort toward meeting their goals,” it said.
The research “does suggest that education and outreach programs aimed at increasing financial and health literacy are important to preserve cognitive health among older adults,” according to FINRA Foundation president Gerri Walsh. “Targeting soft psychological factors, such as confidence, could benefit cognitive health and well-being,” she added.
The study did not see a similar association between cognitive decline and confidence in general, FINRA said.
The study used data from 974 community-dwelling older persons participating in the Rush Memory and Aging Project. Researchers recruited seniors from retirement communities, subsidized housing facilities and local churches, as well as other social service agencies in the Chicago metropolitan area. Participants were an average 81.2 years old with 15 years of education; about 75% were female.
The Link Between Financial Knowledge and Well-Being
A separate FINRA Investor Education Foundation/Rush University Medical Center study examining links among financial and health knowledge found that a faster decline in financial and health literacy was associated with three different outcomes: poorer decision making, higher susceptibility to scams and lower psychological well-being.