Abstract
Older adults face many growing challenges to their economic well-being that directly affect their autonomy and happiness. Increased medical expenses coupled with reduced mobility, impaired eyesight and hearing, and other external factors often lead older adults to retire and accept a fixed income that effectively decreases as they continue to age. This leaves less room for error and a reduced opportunity to recover from poor financial choices, such as those arising from scams and fraud of which older adults are often the target. Biological changes also challenge the decision-making processes of older adults, in particular, an older person's ability to manage personal finances (Lachs and Han, 2015). Age-related declines in the structural volume and functioning of the prefrontal cortex (PFC), altered emotion/reward processing (E-RP), and altered connectivity involving the default mode network (DMN) all play a role in decision making, but compensatory mechanisms also exist (e.g., conserved gist memory; Reyna and Brainerd, 2011). In addition, recent evidence involving the DMN has been interpreted as challenging the traditional view that biased decision making stems from E-RP (Smith et al., 2015; Li et al., 2017). These and other findings suggest an alternative framework for understanding the neural network underpinnings financial decision bias in older adults. In this review, we contrast (a) an interactive relationship such that: DMN activation/connectivity reduces resources dedicated to the cognitive control system to regulate the reward system, increasing the influence of emotion/reward sensitivity on choices and subsequently increasing decision bias with (b) an alternative account of DMN activity that adds to traditional dual-process factors by linking subjective, internal representations to the DMN and to gist-based biases. We briefly review the literature in these areas and describe PFC decline, altered E-RP, and altered DMN in aging. These processes may together affect financial decision making in older adults. We begin, however, with a brief description of decision bias and how traditional dual-process theory is used to explain such bias.