Regular Research Article
Adverse Impacts of Declining Financial and Health Literacy in Old Age

https://doi.org/10.1016/j.jagp.2021.02.042Get rights and content

Highlights

  • •

    What is the primary question addressed by this study?

    What is the relationship of declining literacy with subsequent adverse outcomes?

  • •

    What is the main finding of this study?

    Declining literacy impacts on decision making, scam susceptibility, and wellbeing.

  • •

    What is the meaning of the finding?

    Efforts to mitigate declining literacy promote independence and wellbeing in old age.

Abstract

Objectives

Inadequate financial and health literacy presents a formidable public health and economic challenge in old age. This study investigated declining financial and health literacy in relation to decision making performance, scam susceptibility and psychological wellbeing.

Design

Longitudinal study.

Setting

A community-based cohort in Northeastern Illinois, USA.

Participants

One thousand fourty-six older adults who were free of dementia at baseline and underwent annual clinical and literacy assessments.

Measurements

Financial and health literacy, decision making, scam susceptibility, and psychological wellbeing were assessed using validated instruments. Linear mixed effects models estimated person-specific rates of change in financial and health literacy, and multivariable regression analyses examined the associations of declining literacy with subsequent levels of decision making, scam susceptibility, and psychological wellbeing.

Results

The mean age was 81 years and 76% were female. Over up to 10 years of annual follow-ups, the average financial and health literacy score dropped 1 percentage point a year. Substantial variability in decline was observed between participants. Faster decline in financial and health literacy was associated with poorer decision making, higher scam susceptibility, and lower psychological wellbeing. Notably, these associations were above and beyond the baseline literacy level and persisted even after controlling for cognition.

Conclusions

Most community-dwelling older adults experience decline in financial and health literacy over time, but decline is not inevitable. Declining literacy is related to poorer decision making, greater scam susceptibility and lower wellbeing. These findings suggest that efforts to mitigate declining financial and health literacy may promote independence and wellbeing in old age.

Section snippets

Objective

Financial and health literacy, the acquisition, processing, and utilization of financial and health information to facilitate effective decisions,1 is of particular importance to successful aging in modern society. Every day, thousands of older Americans are confronted with a series of financial and healthcare challenges ranging from planning for retirement, making investment decisions, to choosing Medicare coverage and signing up for healthcare services. Alarming data have shown that older

Study participants

The present study included 1,046 older persons from the Rush Memory and Aging Project (MAP). MAP, started in 1997, is an ongoing cohort study of common chronic conditions of aging that include (but are not limited to) Alzheimer's and other dementias, motor impairment and Parkinsonism, as well as physical frailty and disability.23 The study recruits older residents throughout northeastern Illinois of the United States, and participants primarily come from continuous care retirement communities

Financial and health literacy declines in old age

Characteristics of the study participants are described (Table 1). At baseline, approximately 70% of the financial and health questions were answered correctly on average. We examined the longitudinal trajectory of financial and health literacy using annual literacy scores from baseline up until the last assessment. Consistent with previous reports,32,33 we observed a decline in financial and health literacy over time. On average, the financial and health literacy score dropped about 1

Conclusions

Financial and health literacy is an important determinant of independence and wellbeing across the lifespan but is particularly critical in old age. Cross-sectional studies have reported associations of financial and health literacy with cognition, disability, mental health,15 as well as decision making ability.24,38 Financial and health literacy is also an important correlate of scam susceptibility.12 Of note, these studies have not examined the degree to which declining literacy may have

Author Contributions

LY, GM and PAB contributed to the conception and design of the work; DAB and PAB contributed to the acquisition of data for the work; LY contributed to the analysis of data for the work; all authors contributed to the interpretation of data for the work. LY drafted the work and all authors contributed to revising it critically for important intellectual content.

Acknowledgments

Funding for this study comes from the National Institute on Aging (R01AG17917, R01AG33678, and R01AG34374) and the FINRA Investor Education Foundation. All results, interpretations, and conclusions expressed are those of the research team alone, and do not necessarily represent the views of the National Institute of Aging or of the FINRA Investor Education Foundation or any of its affiliated companies. This study would not have been possible without the contributions of the participants from

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    This study is supported by the National Institute on Aging and the FINRA Investor Education Foundation.

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    © 2021 American Association for Geriatric Psychiatry. Published by Elsevier Inc. All rights reserved.