Researchers Discover Aging Adults' Financial Awareness and the Impact of Dementia

A groundbreaking study highlights that older adults generally understand their financial skills well, but dementia can significantly impair this awareness, increasing risks of financial vulnerability. Early safeguards are essential for protection.
A recent study conducted by Binghamton University reveals that older adults generally possess a strong understanding of their financial abilities, and this awareness tends to improve with age and experience—up until the onset of dementia. The research, published in The Gerontologist, analyzed data from a decade-long study involving 2,800 seniors. Participants were asked to self-assess their capability to perform various financial tasks, including paying bills, making change, and estimating costs over time. They then performed practical financial tasks to compare their perceptions with actual performance.
The findings indicate that, as individuals age, they often become more accurate in evaluating their financial skills, especially when cognitive health remains relatively intact. "We were surprised to find that people can predict their financial abilities quite well, and this skill improves over time," said lead researcher Ian McDonough.
However, this trend reverses for individuals diagnosed with Alzheimer's disease. The ability to accurately judge one's financial skills declines significantly, and individuals may overestimate or underestimate their competence, often remaining unaware of their decline—a phenomenon known as anosognosia. This lack of awareness poses risks for financial safety, including vulnerability to scams or inability to manage essential payments.
McDonough emphasized the importance of early financial safeguards and education for older adults. Family members and caregivers should consider setting up protective measures, like shared bank accounts or alerts, before individuals lose awareness of their impairments. Recognizing early warning signs of decline can help prevent financial exploitation and preserve autonomy where possible.
Future research plans include examining brain activity related to financial reasoning and improving digital banking literacy among older populations. Overall, the study underscores the need for proactive strategies to support financial well-being as cognitive health changes with age.
Stay Updated with Mia's Feed
Get the latest health & wellness insights delivered straight to your inbox.
Related Articles
Mapping the Brain's Naming Network: New Insights into Word Retrieval During Speech
New research uncovers the neural networks in the brain that enable us to retrieve and name words, revealing a crucial dorsal prefrontal hub involved in language processing and speech production.
Fecal Microbiota Transplants: Potential Benefits and Unforeseen Risks
Fecal microbiota transplants show promise for gut health but pose risks due to regional microbiome mismatches. New research highlights the need for targeted microbial therapies to ensure safety and efficacy.