Ameriks, John
[Verfasser:in];
Caplin, Andrew
[Verfasser:in];
Lee, Minjoon
[Verfasser:in];
Shapiro, Matthew D.
[Verfasser:in];
Tonetti, Christopher
[Verfasser:in]
;
National Bureau of Economic Research
Cognitive Decline, Limited Awareness, Imperfect Agency, and Financial Well-being
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Beschreibung:
Cognitive decline may lead older Americans to make poor financial decisions. Preventing poor decisions may require timely transfer of financial control to a reliable agent. Cognitive decline, however, can develop unnoticed, creating the possibility of suboptimal timing of the transfer of control. This paper presents survey-based evidence that wealthholders regard suboptimal timing of the transfer of control, in particular delay due to unnoticed cognitive decline, as a substantial risk to financial well-being. This paper provides a theoretical framework to model such a lack of awareness and the resulting welfare loss