Cognitive Aging and the Capacity to Manage Money

IB#17-1

The brief’s key findings are:

  • Most people in their 70s and 80s can still manage their money, as financial capacity relies on accumulated knowledge, which largely stays intact with age.
  • However, financial novices who lack such knowledge and are forced to take over money management after a spouse dies will likely need help.
  • And individuals who develop a cognitive impairment may see a substantial reduction in their financial capacity and need someone to step in for them.
  • Given that this impaired group will grow to more than a third of individuals who reach their 80s, better monitoring of financial capacity will be essential.