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Adults Make Riskier, More Inconsistent Decisions As They Get Older, Study Finds
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."
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
...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.
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."
"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.
"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."
Might this have something to do with the fact that age discrimination is ripe in the workplace. Try landing a well-paying corporate gig if you are over 60, no matter your skill set. It's nigh impossible. And, with decreasing job opportunities for workers over 60, one can imagine that some significant minority of them become more desperate to the point where they begin to consider irrational alternatives to making ends meet. Of course, this doesn't eliminate the fact that very senior individuals - some with excess money to burn, use that money to fill the ever-increasing, yawning gap of boredom and disconnection in their lives brought on by the social isolation of the elderly in our culture. So, I think this is more of a structural problem.
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.
My (german) grandmother has advanced alzheimer's, and is has reverted pretty much to her childhood. On a good day, she's in her 20's (which covers the period from 1939-1945). She has been known to wax poetical about Hitler, and has interesting ideas about homosexuals, gypsies, and the jews.
I still visit her. I leave my girlfriend at home when I visit her, and smile politely when she tries to introduce me to men she knows (knew back then). One time, she tried to hook me up with my uncle. At family events, my GF is "a good friend who didn't have anybody to visit" for the benefit of my grandmother. You may choose to sweep the elderly under the rug, I choose not to. We can still be compassionate in how we treat them, and there are constructive ways to deal with people who hold beliefs that we disagree with.
You didn't interpret even TFS correctly: the "earnings" were from the game to which the participants were subjected. It nothing at all to do with their employment prospects.
I was reading this in my car on the way to the payday loans place and I got so outraged that I drifted out of my lane and hit a parked gasoline tanker. So I figure I might as well park here and finish reading the thread. There's a lot of smoke but with the windows rolled up it isn't too bad.
Oliver's law of assumed responsibility: If you're seen fixing it, you will be blamed for breaking it.
This sort of thing is in the general class of cognitive biases. Another example of this class is the Dunning Kruger effect.
Cognitive biases have a large negative effect on the financial performance of the general public. In particular if you want to be a successful investor it's very important to be aware of this issue.
Daniel Kahneman (a psychologist) won the 2002 Nobel Memorial Prize in Economics because of his pioneering work in the field of Behavioral Economics.
http://en.wikipedia.org/wiki/Daniel_Kahneman
Not all people over 65 are rich, you know; fact is, most are quite the opposite.
Your "soap line" America where the elderly eat dog food is a fiction that exists in the minds of dupes that swallow the lamentations and whining of pressure groups. The US elderly are the wealthiest class of people in the history of the species. They've voted themselves a nice suite of bennies to offset the cost of their fifth wheels, boats and cabins. Today, as in Oct. 1, 2013, they've managed to bridle their grand-kids to fund even more healthcare; a cost they did not pay for their own elders.
Erratic financial decisions are a symptom of excessive disposable wealth.
Dude, i am as pissed about what the baby boomers have done to this nation as any other person not in that generation, but seriously, stop being an asshole. It is not a myth that their are many poor to lower middle class folks (particularly women and minority) folks over 65 that have to worry greatly about how they are going to end their days. I am only 45 and doing decently and I am panicked about it, and my poor mother is doubly so (while my rich asshole father is happily frittering his days away and donating to tea party assholes).
A lot of folks over 65 were just as screwed by the fat cats that made sure their retirement was going swimmingly while passing the cost on to others. There is significant desperation even amongst the baby boomers and for the same reasons. Only they are less able to distract themselves, if only because they are literally less physically able to do so. Why to you think old age alcoholism and suicide are such issues? Is it because they are so rich that the worldly ennui is killing them, or is it maybe that they can no longer deny how fucked they are? appreciate your youthful self confidence while you can, it gets harder as you get older, unless you are one of the lucky rich ones.
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.
The study says fogies prefer less risk.
Not quite. The study found that geezers are less willing to take a risk to win, but more willing to take risks to avoid a loss. In many cases they were avoiding good risks and taking bad risks. Overall, they were making worse decisions than younger people when either accepting or declining risks.
The Rising Age Gap in Economic Well-Being
As per their training, the old think they're poor . That's why they have zero hesitation imposing whatever burdens they're told they deserve on whomever they're told can afford to pay.
There is nothing to worry about. Today. The regime is secure and the bennies will flow.
Right up until the currency folds.
Then the cutbacks; the PIIGS found out what that's about.
None of this is real. The whole damn nation is one giant ponzi scheme of vote buying, and it has a expiration date.
The typical U.S. household headed by a person age 65 or older has a net worth 47 times greater [boston.com] than a household headed by someone under 35. 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.
Isn't that as it should be, after working and saving all your life? Net worth includes possessions, house, savings for retirement, etc. Also, take the aging one-percenters (or the 0.1%) out of the numbers (or use median instead of mean) and I bet the disparity growth is a lot flatter. Fundamentally, there's a difference b/t being well off because you worked hard all your life and being well off because you (1) owned the means of productions, (2) bought off legislators, and (3) found a way to exploit others.
-1, Too Many Layers Of Abstraction
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.
As a person on the tail end of the boomer generation, I saved a lot of money from my paychecks, I retired at 56, and am living quite comfortably.
We get surely a lot of hate. We're Selfish, entitled, and now foolish. Bloody fucking hell - I don't even collect SS for many years yet. I am not costing you poor abused, persecuted, and robbed of your entitlement everyone elses a damn thing, You want my fucking bank account or something?
Perhaps a different perspective is in order.
I started my career, back in the 70's, and immediately began saving. Pretty conservative investments. A lot of people I worked with at the time said that was pretty stupid. I had people making 3, 4 times as much who saved nothing, Whatever.
Young people have their chance to do the same as long as they have a job . But many don't want to. Just like many of the folks I worked with way back then. Right now interest rates are not that good. But history shows they will eventually go back up. Inflation was the big excuse not to save when I was young. Now it's interest rates. Ignore that. Save. You'll be an idiot for a few years. After that, not so much.
Now for a dose ot truth.
We are at the point, where people who haven't planned well, or people who don't really intend to plan well, resent and hate those who did. But if you are successful in your efforts to make those of us who did plan well poorer, that will not make you wealthy. You'll still be poor, you'll just have more company.
So if you really really gotta hate on us, go ahead. Tha'ts the only thing you'll have though - your hate, and the prospect of trying to live on Social Security. Save your money - no one owes you anything.
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.