While many individuals who choose to age in place embrace mind puzzles, crosswords and mobile applications designed to keep users mentally alert, the University of California, Riverside, has good news for finance management. A new study shows that however aging adversely affects certain areas of the brain, the ability to coordinate and understand finances remains largely intact. By some metrics, the cognitive ability to manage money even sharpens as people get older.
You might credit much of that to decades of experience, but it’s also supported by research. Ye Li, an assistant professor of management and marketing at the University of California, describes two types of intelligence that frame healthy financial decisions. The first relies on “active thinking,” while the other depends on “expertise and knowledge,” which goes unaffected by aging.
The study was commissioned to explore the financial choices people make as they get older. Health Day says that while roughly 5 percent of older individuals say they have been financially exploited in the last year, their personal decisions with money are generally very good. For example, credit scores of aging people are usually significantly higher than their less-experienced counterparts, and older individuals score higher on finance competency tests.
“However, [aging people] may run into trouble when it comes to new and complex decisions that they have less experience with,” said Li. “For example, choosing a new health care plan after retirement or planning how to make retirement savings last the rest of their life are extremely difficult decisions with a lot of variables that will tax older decision makers.”
Through Independa’s intuitive Angela™ platform, care recipients and caregivers can communicate about important financial decisions that promote one’s ability to age in place. With handy reminders, the system makes it easy for people living independently and their loved ones to support activities of daily living.
