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Adults Make Riskier, More Inconsistent Decisions As They Get Older, Study Finds

Posted by Soulskill on from the they-have-more-reason-to-worry-about-the-short-term dept.

schliz writes "People aged over 65 make poorer financial decisions and more inconsistent choices than younger individuals with the same IQ, an international research group has found. The study (abstract) had 135 healthy participants aged 12-90 make a series of decisions: for example, choosing between gaining $5 and the chance to win $20 in a lottery. On average, over-65s earned 26-39% less than all other age groups, including adolescents — a finding that could partially explain their susceptibility to problem gambling and scams."

15 of 225 comments (clear)

  1. They've got money to burn by BenSchuarmer · · Score: 2, Insightful

    and they have to get rid of it somehow.

    1. Re:They've got money to burn by CanHasDIY · · Score: 5, Insightful

      OR, they're more worried about fiscal security at the end of their lives, and fear of things like being shoved in a crappy nursing home and having all their possessions sold off frightens them into taking risks they wouldn't otherwise consider.

      Not all people over 65 are rich, you know; fact is, most are quite the opposite.

      --
      An enigma, wrapped in a riddle, shrouded in bacon and cheese
    2. Re:They've got money to burn by h4rr4r · · Score: 3, Insightful

      A lot of that isolation is self enforced. Of course no one wants to visit great-grandma when she just wants to scream racist gibberish about the president and homophobic crap about your cousins. Old people often have beliefs that are simply not compatible with living in a modern society. You can't take them into public if you fear they may call your waiter the N word or go on a tirade about the jews when you are trying to get groceries.

    3. Re:They've got money to burn by icebike · · Score: 4, Insightful

      Mod parent up.

      That's pretty much the way I read it too.

      Old folks don't necessary look at the world as a place where you buy a few shares of Apple or Google and wait for it to grow, or where you throw money into a gambling addiction expecting your luck has to turn someday.

      The author tries to spin simple fiscal conservatism as something irrational. But older people know the odds are always in the houses favor, and are less willing to play that game. Sounds like the people with gambling addiction were the people writing the story.

      --
      Sig Battery depleted. Reverting to safe mode.
    4. Re:They've got money to burn by timeOday · · Score: 4, Insightful

      Isn't that as it should be, after working and saving all your life?

      You ignored: "This wealth gap is now more than double what it was in 2005 and nearly five times the 10-to-1 disparity a quarter-century ago" even after you quoted it! Some disparity is desirable (since people bulk up savings for retirement) but why has it grown so fast and so large?

      I can tell you this, my dad worked at a company extremely similar to where I work, and he is enjoying a retirement I will never have, at least without extreme sacrifice now which he did not do. He got a full pension and pre-medicare healthcare benefits - both things that my employer has cut since after I hired on here. I tell him about it and he's kind of surprised. I can't blame him personally. But in general old people are just cruising along assuming nothing has really changed and "what's the matter with kids these days" that they're racking up college debt and not settling down, seemingly oblivious to the fact that they're sucking up everything in sight just by honoring the promises they made to each other back when, while failing to set enough aside to pay for them.

  2. You reach a certain age and... by skids · · Score: 5, Insightful

    ...someday you say to yourself "Look, for my entire life I've done the 'right thing' and even now it doesn't help my joints stop aching or buy me a bowel movement, so what the hell, let's try something else."

    --
    Someone had to do it.
  3. "Feeblemindedness" by TWiTfan · · Score: 4, Insightful

    That's what my dad used to call it when it happened to grandpa. Grandpa went from being a shrewd businessman to being someone we had to keep an eye on at all times (he would fall for every con artist who showed up at his door). That why "Travellers" in particular prey on older people.

    --
    The cow says "Moo." The dog says "Woof." The Timothy says "Thanks, valued customer. We appreciate your input."
    1. Re:"Feeblemindedness" by ninlilizi · · Score: 2, Insightful

      Myself being a Rromani Traveller.

      I would like to point out that all such racist stereotyping is unacceptable. Regardless weather you employ "cute" usage of quotation marks around proper nouns or not.

      At no point should it be acceptable that /anybodies/ ethnic or racial background be a synonym for 'criminal'

      (please don't mod me deep beneath the abyss... This needs to be said)

  4. I think they were just bored by GrumpySteen · · Score: 4, Insightful

    "Each participant were faced with 320 decisions: for example, choosing between gaining $5 and the chance to win $20 in a lottery."

    After a few dozen questions like that, I'd be so bored that I'd start choosing randomly without thinking about it just to get it over with. There's no way in hell I would seriously think about each and every question out of a list of 320.

    1. Re:I think they were just bored by h4rr4r · · Score: 4, Insightful

      Did they correct for income?

      Kids and young folks are more motivated to get $5 since they have low resources. If you are retired, why not take the chance on $20 vs a sure $5 you don't need?

  5. What do you have to lose at EOL? by medv4380 · · Score: 4, Insightful

    If you figure you only have 5 to 10 more years left why not take a little more risk. When you have 50 years left to regret the choice it makes more sense to take less risk.

  6. Well that explains alot by halfEvilTech · · Score: 3, Insightful

    I may get flamed for this but screw it. This would explain a lot of the issues we see from the Congress Critters.

  7. Re:Who does these studies? by dgreer · · Score: 1, Insightful

    Hmmm... so people with no practical experience in life are judging people with massive experience on the quality of their decision making abilities. What could POSSIBLY go wrong?

    --
    "I don't think software should necessarily be free ... but if you pay for it, it should work!" - me
  8. Is it age or a generational issue? by gameboyhippo · · Score: 3, Insightful

    I hardly believe it's an age issue. You would have to demonstrate that the same person made different decisions at different points in their life. It would be like saying, "The older you get, the more likely you'll not know how to use a cell phone." It's just not true.

    The reality is that you have generational cultures. For example, I'd bet older people smoke more too. Doesn't mean I'm going to do it when I get old. I know better now than they did at my age.

  9. Most comments seem to miss the point by GauteL · · Score: 3, Insightful

    ... possibly because the summary does a very poor job of representing the article, by leaving out the most important part of it.

    The elderly are not overall more willing to take risks, it is just that the risks they are taking are different and less consistent. If faced with potential earnings, they'd rather take smaller guaranteed earnings than larger and riskier earnings; exactly the sort of stereotype of the cautious elderly you'd expect.

    But if faced with losses they'd rather take the risk of a much bigger loss than the guaranteed loss.

    My interpretation is that they are so afraid of losses they'll do anything to avoid them, even irrationally gambling to avoid loss. This sort of fits with the stereotype of keeping money in your mattress to avoid losses in bank charges and taxes, despite the fact that one single fire or robbery would ruin you.