How will Cognitive Aging Affect your Financial Behavior?
The growing older population needs to make important financial decisions about the wealth they have accumulated over a lifetime. Meanwhile, cognitive abilities, a critical component for optimal decision-making, decline sharply in old age.
Will weakening cognitive abilities influence financial behavior among older adults? What is the underlying mechanism of the effect?
Dr. Ning Tang studies the effects of cognitive abilities on a set of financial behaviors with different dependence on information processing abilities. She also explores the potential ways cognition works on financial behavior. For example, do cognitive abilities affect financial decision-making through information processing ability or noncognitive skills such as self-efficacy? Understanding this issue has important implications for policymakers to assist the older population through the widespread cognitive aging process.
Dr. Tang’s work is supported by the TIAA Institute.
“Older adults face many challenges when making financial decisions, especially with declining cognitive abilities. It calls for greater efforts to support them through the cognitive aging process.” -Ning Tang