Older and Wiser

(From ALFA)

A new study has found that although the ability to learn naturally decreases with age, experience accumulated over a lifetime allows most older adults to make better decisions than their younger counterparts. This shows in part that you are indeed wiser when you are older.

Researchers from the University of California, Riverside say the study is the first to measure decision making and intelligence over the lifespan through what they call fluid and crystallized intelligence. The authors describe fluid intelligence as the ability to learn and process information, while crystallized intelligence is a term that refers to experience and accumulated knowledge.

Previous research has found that fluid intelligence decreases with age, but no prior research had been undertaken to discover if this had any effect on decision-making ability.

Test results indicated that the older cohort scored as well or better than the younger participants in four economic decision-making measures.åÊ ‰ÛÏThe findings confirm our hypothesis that experience and acquired knowledge from a lifetime of decision making help offset the declining ability to learn and process new information,‰Û said Ye Li, assistant professor at UC Riverside and lead author of the study.

With the average American holding off on retirement later than previous generations, these results show that most older adults will be well-equipped to handle important choices related to their finances and health care. However, the older participants in this study were found to have lower fluid intelligence, prompting the researchers to note that older adults can still benefit from aids such as a financial advisor when making important financial decisions.åÊ

Read the full report: Complementary Cognitive Capabilities, Economic Decision-Making, and Aging