Sound credit scores and financial decisions despite cognitive aging

At a time when the world's 65-and-older population will double by 2035, policy changes have transferred many complex financial and healthcare decisions to individuals. Age-related declines in cognitive ability raise the specter that older adults facing major financial decisions may find them increasingly challenging. We explore whether knowledge and expertise accumulated from past decisions can offset age-related cognitive declines. Using a unique dataset that combines measures of cognitive ability, knowledge, and credit scores — a measure of creditworthiness that reflects sustained ability for sound financial decision-making — we find that cognitive decline does not spell doom. Instead, domain-specific knowledge and expertise provide an alternative route to sound financial decisions. These results suggest guidelines for designing effective interventions and decision aids across the life span.