What the Health and Retirement Study Tells Us About Cognitive Ability, Financial Literacy, and the Demand for Financial Advice at Older Ages

Cognitive ability and financial literacy can have an indeterminate effect on older persons’ financial behavior. Older investors who recognize that their capacity to manage financial assets is diminished would rationally delegate the task to others. But those who mistakenly believe their acumen remained intact might continue managing their money themselves. This study examines the ambiguous influence of cognitive ability and financial literacy at older ages to gauge their impact on demand for, and use of, financial advice.