How monetary savings may be linked to thinking abilities in older adulthood

What is it about?

This study examines how older adults’ financial situations, specifically how much money they have in their checking and savings accounts, relate to their thinking abilities. While previous research has shown that individuals with higher socioeconomic status (such as higher income or education) tend to have better cognitive functioning in later life, this study focuses on monetary savings as an often overlooked but important factor. Among a group of older adults without dementia, those with greater savings performed better on tasks that involve reasoning and flexible thinking. In particular, individuals with greater savings performed better on a task that measures inhibitory control, a core cognitive ability that allows people to restrain impulses and pause before acting on automatic thoughts. Notably, savings was found to be more closely related to these abilities than income.

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Photo by Markus Kammermann on Unsplash

Photo by Markus Kammermann on Unsplash

Why is it important?

Most studies use income to understand someone’s financial situation, but income does not always tell the full story – some people earn a lot yet still live paycheck to paycheck. This study suggests that monetary savings may provide a more nuanced understanding of older adults’ financial stability and its relationship to important brain functions. Managing finances often requires core thinking skills like the ability to think flexibly and inhibit impulses, so changes in financial behavior, like unusual drops in savings, could signal changes in cognitive functioning. However, more research is needed to replicate these findings in larger, more representative samples and to better understand how other aspects of financial status relate to cognitive abilities.