A new study out of Texas Tech University studied the spread between the two scores. Once a person gets past age 60, their financial confidence continues to rise while their financial literacy starts to fall. This appears to be true regardless of gender, ethnicity, or income level. (The spread between the two scores increased the most in the area of insurance, as annuities are purposely made more and more complicated just to confuse clients.)
Naturally, this new study reinforced the perception of older people losing their mental sharpness. However, I have three thoughts on that:
First, as any college freshman can attest, there is an art to taking exams, relying on different types of memory. The lack of experience taking tests apparently catches up at some point after age 60, but that says nothing about intelligence, perceptional abilities, or judgment.
Second, older people have more trouble getting a good night’s sleep. An unrelated study from Uppsala University in Sweden noted that two rare proteins (NSE and S-100B) appear in the brain shortly after it has sustained even the most minute permanent damage and further noted those proteins appear after “just one night of sleep deprivation.”
Third, the brain is just a glorified muscle. If it is not exercised properly, it will atrophy or lose its strength. After a lifetime of work that requires both brain-exercise and brain-discipline, seniors enjoy their well-earned freedom from that, but it is an unhealthy freedom. One of the smartest people I know is 95-years-old and just as curious about the world as he ever was. He is a perpetual student.
The best 25 cents I ever spent was in the bookstore of the Special Warfare Center in Fort Bragg for a cheap little poster. It shows a wizened old First Sergeant, wearing his beret, saying “The mind is your primary weapon — keep it working!”
It still hangs in my office today.