Good news for the aging brain

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(MoneyWatch) Years ago, a colleague of mine showed me a study which found that cognitive ability can start slipping as early as age 50. "I guess that means we only have a limited time left in the money management business," he teased. That study has always haunted me -- the idea that my cognitive abilities would begin to fade at about the same time as my tennis game was depressing.

Thankfully, a new study examined adults 50 to 79 years of age to determine the connection between cognitive health, aging and decision-making capacity, found that age alone is not a predictive factor of lower decision making capacity. The "Healthy Brain, Healthy Decisions" study was a collaboration of the MetLife Mature Market Institute and the Center for BrainHealth at The University of Texas at Dallas and the University of California, San Francisco.

The good news is that those who are 50 to 79 are as logically consistent as younger decision-makers and retain the ability to sift through and focus on important information, while ignoring less relevant information. This is referred to as "strategic learning capacity" and it may actually increase with age.

As you might imagine, if you can absorb the important stuff, you are more likely to make logically consistent decisions, which can have a significant impact on your financial life. Strategic learners are less likely to fall victim to bias toward riskier options, and that seems to be one of the best parts of aging. Instead of the youthful folly that ensnares some into get-rich-quick schemes, and to a lesser extent, creates the delusion that you can beat the market, aging helps you recognize that choosing sure payoffs rather than gambling for a larger amount can net you more money over the long term.

While, memory, reasoning, and complex problem solving can decline with age, this report underscores that those who remain cognitively healthy and free of dementia or other neurological causes of cognitive impairment, like Alzheimer's are perfectly capable of managing their financial affairs and making prudent decisions. Here again, the news is encouraging: according to the National Institute of Aging, approximately 87 percent of those age 65 years and older are cognitively healthy.

So here's something to consider: if you or a loved one find yourself struggling with mental tasks that were previously easy, don't just chalk it up to aging. The findings suggest that when changes in decision-making emerge, they should prompt a medical evaluation for potentially reversible causes of cognitive decline, or for chronic conditions that would require a substantial shift in lifestyle.

Notice that I said reversible in the previous sentence. Amazingly, our brains can strengthen as we age. "To take advantage of the brain's inherent ability to grow, rebuild, and rewire itself, individuals need to implement the necessary steps to maximize cognitive function sooner rather than later, and maintain the motivation to remain cognitively active, informed, and engaged in personal financial decisions."

The more you challenge your brain, the more new nerve pathways you form. Beyond reading or finishing your daily crossword, another way to challenge the brain is to learn how to play a musical instrument or speak a new language, both of which provide great stimulation. So do games like chess, bridge and mahjong, that require you to strategize and interact socially at the same time.

And back to that tennis game...it is exciting for this aging jock to learn that exercise can help enhance brain health. Studies show that even 30 minutes of modest activity can help people increase their cognitive functions. The science that demonstrates the link between activity and mental functioning might encourage you to walk to your next bridge game! The financial payoff to remaining sharp is that you will likely make prudent decisions and retain your independence long into your golden years.

Distributed by Tribune Media Services Inc.

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    Jill Schlesinger, CFP®, is the Emmy-nominated, Business Analyst for CBS News. She covers the economy, markets, investing and anything else with a dollar sign on TV, radio (including her nationally syndicated radio show), the web and her blog, "Jill on Money." Prior to her second career at CBS, Jill spent 14 years as the co-owner and Chief Investment Officer for an independent investment advisory firm. She began her career as a self-employed options trader on the Commodities Exchange of New York, following her graduation from Brown University.