%0 Journal Article %J Journal of Family and Economic Issues %D 2016 %T Cognitive Ability and Post-Retirement Asset Decumulation %A Chris Browning %A Huston, Sandra %A Michael S. Finke %K Cognitive Ability %K Consumption and Savings %K Retirement Planning and Satisfaction %X Post-retirement asset decumulation decisions are complex and may be affected by cognitive abilities. Estimating uncertainties such as life expectancy and medical costs, and incorporating them effectively into decumulation decisions may be especially difficult as retirees face age-related changes in cognition. This may result in rates of decumulation that are contradictory to the goals that motivated accumulation, leading to potentially large utility losses. We investigated the relevance of cognitive ability to asset decumulation decisions within our sample. We found that cognitive ability was a significant predictor of the rate of asset decumulation, and that those with lower levels of cognitive ability were decumulating at a significantly lower rate. We also showed that the level of cognitive ability influenced the effects of expected longevity, market returns, and medical costs. While the estimates for these factors were consistent between those with high and low cognitive ability, there were significant differences in how the estimates were incorporated into the asset decumulation decisions of the two groups. %B Journal of Family and Economic Issues %V 37 %P 242 - 253 %8 Jan-06-2016 %G eng %U http://link.springer.com/10.1007/s10834-015-9453-4http://link.springer.com/content/pdf/10.1007/s10834-015-9453-4http://link.springer.com/content/pdf/10.1007/s10834-015-9453-4.pdfhttp://link.springer.com/article/10.1007/s10834-015-9453-4/fulltext.html %N 2 %! J Fam Econ Iss %R 10.1007/s10834-015-9453-4 %0 Journal Article %J Journal of Consumer Affairs %D 2015 %T Cognitive Ability and the Stock Reallocations of Retirees during the Great Recession %A Chris Browning %A Michael S. Finke %K Health Conditions and Status %K Net Worth and Assets %K Public Policy %K Retirement Planning and Satisfaction %X Retirees are increasingly responsible for managing their retirement savings. The ability to manage these assets efficiently can have an important impact on retirement well-being. Lower levels of cognitive ability in old age can reduce an investor's ability to control emotional responses to a loss. Greater sensitivity to loss may increase preferences for safety following a market decline, resulting in allocations away from stocks that are associated with long-term underperformance. We investigate whether cognitive ability is related to stock reallocations among retirees during the Great Recession. Using the Health and Retirement Study, we find that cognitive ability is negatively related to allocations away from stock. Compared to those with the lowest levels of cognitive ability, respondents with higher cognitive ability are 40 less likely to reduce their stock allocation by 50 or more. These results suggest that the quality of investment decisions in old age may be compromised by cognitive decline. %B Journal of Consumer Affairs %I 49 %V 49 %P 356-375 %G eng %N 2 %4 retirement savings/assets/health shocks/cognitive ability/stock reallocations/Great Recession/Cognitive decline %$ 999999 %R 10.1111/joca.12065