Abstract
People of all ages face important financial decisions. The aging literature suggests that older adults experience developmental changes in numeracy, experience, emotion regulation, and motivation that may potentially affect the quality of their decisions. In a national life-span sample (n=926) recruited from across the United Kingdom, we therefore examined the role of these four factors in financial decision making. Participants completed established measures of the four factors as well as measures of financial decision making, including money management, credit card repayment, sunk cost bias, and financial decision outcomes. We found that performance on each of our financial decision tasks improved with age. Moreover, these age-related improvements were explained by older adults’ increased experience and better emotion regulation. These patterns held in structural equation models that took into account all decision tasks, the four factors, and socio-demographic variables. Our findings have implications for theories on aging and interventions targeting financial decisions.