Elderly individuals are often the targets of various financial scams, ranging from phishing emails to fraudulent phone calls that aim to deceive them out of their life savings.
A recent publication by Ian M. McDonough, an Associate Professor of Psychology at Binghamton University, casts light on how changes associated with ageing might influence our financial management capabilities and outlines strategies to maintain mental acuity as we grow older. The paper, titled “Separating neurocognitive mechanisms of maintenance and compensation to support financial ability in middle-aged and older adults: The role of language and the inferior frontal gyrus,” co-authored with Macarena Suárez-Pellicioni from the University of Alabama, has been published in the Archives of Gerontology and Geriatrics.
This research centred on cognitively sound adults aged between 50 and 74. It utilised MRI scans to assess brain structure and functional connectivity. Participants in the study were also asked to carry out straightforward financial tasks, such as balancing a chequebook or making change, which necessitate various cognitive skills, including memory, executive functioning, and numerical abilities—all of which may experience a subtle decline due to ageing.
Previous studies that explored financial management in the context of Alzheimer’s and brain decline predominantly focused on the parietal cortex, which plays a critical role in attention and simulating potential future scenarios. However, McDonough highlights that little focus has been directed towards brain regions associated explicitly with mathematical processing, mainly studied in childhood development.
Mathematical cognition involves distinct brain areas. The inferior frontal gyrus, for instance, is pivotal in retrieving mathematical information from memory. McDonough illustrates this with simple addition, such as ‘What is 3 plus 3?’, to which the immediate answer ‘six’ springs to mind without calculating, thanks to years of rote learning. In contrast, the middle frontal gyrus is employed for more complex calculations, which demand more cognitive effort and increase the likelihood of errors.
As normal ageing progresses, the brain’s prefrontal cortex tends to shrink, and this process accelerates with Alzheimer’s disease. This leads to more frequent errors in financial tasks as the brain ceases to rely on memorised solutions and instead recruits other areas to compensate. These changes could serve as markers indicating increased susceptibility to scams.
Understanding these brain alterations is crucial as it can guide the development of interventions targeting these specific regions, potentially helping to preserve an individual’s independence. McDonough’s findings suggest that successful financial management might depend more heavily on language processing capabilities than mere calculation ability. Enhanced language skills, which promote increased connectivity between different brain areas, were found to correlate with better performance in financial tasks.
Moreover, higher household income and financial literacy, both indicators of socio-economic status, appear to shield against age-related financial skill decline. The foundation of effective financial management in later years relies on well-developed memory skills, which are more likely to be cultivated in environments where financial literacy is emphasised.
Therefore, educational programs focusing on financial knowledge and ledge might be crucial in helping individuals maintain robust financial decision-making capabilities. Regular practice of basic mathematical skills, like those learned in school, can support sound financial management across one’s lifespan.
However, it is also vital for both individuals and caregivers to remain vigilant for signs of cognitive decline that could increase older adults’ vulnerability to financial scams and exploitation. Financial tools and technologies and legal safeguards like powers of attorney for automatic payment systems are essential for protecting older adults while allowing them to retain autonomy over their financial decisions.
Managing finances effectively is key to maintaining independence in later life, asserts McDonough, stressing the importance of interventions designed to strengthen the brain and support health during financial management.
More information: Macarena Suárez-Pellicioni et al, Separating neurocognitive mechanisms of maintenance and compensation to support financial ability in middle-aged and older adults: The role of language and the inferior frontal gyrus, Archives of Gerontology and Geriatrics. DOI: 10.1016/j.archger.2024.105705
Journal information: Archives of Gerontology and Geriatrics Provided by Binghamton University
