Cognitive functioning, financial literacy and judgment in older age

Paul Gerrans, Anthony Asher, Joanne Kaa Earl*

*Corresponding author for this work

    Research output: Contribution to journalArticlepeer-review

    Abstract

    We investigate the relationships between financial literacy, financial judgment, and cognitive ability at older ages. We find people who actively manage their own retirement savings portfolios display greater levels of financial literacy and judgment than those who do not. We identify the different cognitive processes underlying financial judgment and decision-making tasks versus those underlying learned concepts such as basic financial literacy. Although these decline at different rates the latter may potentially compensate for, and mask declines, in the former. We find an overall low propensity to seek financial advice which has no significant relationship with cognitive functioning. Our findings underscore the importance of monitoring cognitive ability in older ages.
    Original languageEnglish
    Pages (from-to)1637-1674
    Number of pages38
    JournalAccounting & Finance
    Volume62
    Issue numberS1
    Early online date22 Aug 2021
    DOIs
    Publication statusPublished - Apr 2022

    Keywords

    • retirement savings and ageing
    • cognitive ability and decline
    • financial literacy
    • dementia
    • Wonderlic
    • PAL

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