By Jill Schlesinger
Tribune Media Services
Years ago, a colleague of mine showed me a study about how cognitive ability can start slipping as early as age 50.
“I guess that means we only have a limited time left in the money management business,” he teased. That study has always haunted me.
Thankfully, a new study examined adults 50 to 79 years of age to determine the connection between cognitive health, aging and decision-making capacity. It found that age alone is not a predictive factor of lower decision-making capacity.
The “Healthy Brain, Healthy Decisions” study was a collaboration of the MetLife Mature Market Institute, the Center for BrainHealth at The University of Texas at Dallas and the University of California-San Francisco.
The good news is that people ages 50 to 79 are as logically consistent as younger decision-makers, and they retain their ability to sift through and focus on important information, while ignoring less relevant information. This is referred to as “strategic learning capacity,” and it may actually increase with age.
As you might imagine, if you can absorb the important stuff, you are more likely to make logically consistent decisions, which can have a significant impact on your financial life. Strategic learners are less likely to fall victim to bias toward riskier options, and that seems to be one of the best parts of aging.
Instead of the youthful folly that ensnares some people into get-rich-quick schemes, and to a lesser extent, creates the delusion that you can beat the market, aging helps you recognize that choosing sure payoffs rather than gambling for a larger gain can net you more money over the long term.
While memory, reasoning and complex problem solving can decline with age, this report underscores that those who remain cognitively healthy and free of dementia, Alzheimer’s or other neurological causes of cognitive impairment, are perfectly capable of managing their financial affairs and making prudent decisions.
So here’s something to consider: If you or a loved one find yourself struggling with mental tasks that were previously easy, don’t just chalk it up to aging. The findings suggest that when changes in decision-making emerge, they should prompt a medical evaluation for potentially reversible causes of cognitive decline, or for chronic conditions that would require a substantial shift in lifestyle.
Amazingly, our brains can strengthen as we age. The more you challenge your brain, the more new nerve pathways you form. Beyond reading or finishing your daily crossword, another way to challenge the brain is to learn how to play an instrument or speak a new language, both of which provide great stimulation. So do games like chess and bridge.
Jill Schlesinger is the Editor-at-Large for www.CBSMoneyWatch.com.