Cognitive Impairment and Financial Decision Making in Older Adults

As populations age globally, the intersection of cognitive decline and financial autonomy has become a critical concern for clinicians, policymakers and families alike. Cognitive impairment—ranging from subtle deficits in attention and memory to more pronounced declines in executive function—can undermine an individual’s ability to manage bills, investments and legal affairs. Even mild cognitive impairment (MCI) may reduce the capacity to budget, detect fraudulent schemes or adapt to changing financial products. Neurodegenerative conditions such as Alzheimer’s disease and Parkinson’s disease often manifest with early disruptions in numerical reasoning, risk assessment and metacognitive awareness, increasing vulnerability to poor decision making. Assessment tools that blend performance-based tasks with self- and informant reports have revealed consistent patterns: as cognitive control and planning abilities erode, older adults show reduced accuracy in everyday financial tasks, diminished foresight in long-term planning and overconfidence in their own judgements. In turn, this has practical implications for early screening, tailored financial coaching, legal protections and the design of age-appropriate financial services. By clarifying the cognitive, emotional and social factors that influence financial decision making in later life, researchers aim to support autonomy while safeguarding against exploitation and adverse outcomes.

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Cognitive Impairment and Financial Decision Making in Older Adults publication trend

The graph below shows the total number of articles in cognitive impairment and financial decision making in older adults across all publications each year (not limited to Nature Index journals).

Technical terms

Mild cognitive impairment (MCI): A transitional stage of cognitive decline characterised by deficits in memory or other cognitive domains that exceed normal ageing but do not significantly impair daily living.

Financial capacity: The multidimensional ability to manage financial affairs, spanning basic tasks (bill payment) through complex decisions (investment planning, fraud detection).

Executive functions: Higher-order cognitive processes including planning, cognitive flexibility and inhibitory control, essential for sound decision making.

Metacognition: Awareness and monitoring of one’s own cognitive processes, such as confidence in financial judgements and calibration of decision accuracy.

References

1. Let Us Talk Money: Subjectively Reported Financial Performance of People Living with Neurodegenerative Diseases—A Systematic Review. Neuropsychology Review (2023).
2. Financial Decision-Making in Neurological Patients. Brain Sciences (2022).
3. Cognitive, Emotional, and Daily Functioning Domains Involved in Decision-Making among Patients with Mild Cognitive Impairment: A Systematic Review. Brain Sciences (2024).