Older People Take More Financial Risks

Smart Money reports:

The young are fearless and bold. The old are scared and cautious. That’s the conventional view of how we feel about risk over the course of a lifetime. We start out brash — ready to bet it all on a long shot. But as we age, we need to hoard our resources and make sure we’ve provided for the slow shuffle into frailness and vulnerability.

New research in behavioral economics and neuroscience, however, is complicating this simple picture. Part of aging is an inevitable decline in cognitive function.  And part of that decline is a change in how our brains respond to risk.  But that change isn’t necessarily to become more fearful of risk; in fact, it may be just the opposite.

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