Financial Insecurity and Cognitive Decline: What’s the Connection?



Ordinary common sense and experts in psychology and neurobiology say that most older people want long and healthy lives; satisfaction (with a little joy and happiness added); and the agency (more precisely, most people want a “locus of control”). Some people may express these aspirations in terms of what they don’t want: that is, “I don’t want to be stressed, depressed and demented as I get older.

Chronic negative stress is the most likely causal link between financial insecurity and age-related cognitive decline. In other words, financially insecure older people experience more stress, which can contribute to cognitive decline. Causation also works in the opposite direction, people in cognitive decline are more susceptible to financial errors and predation, which in turn adds to financial decline.

In a tragic feedback loop, people with cognitive decline are more susceptible to financial errors, and predation and financial security can make people so stressed that their cognition declines.

Financial insecurity feeds on itself and accelerates as humans are susceptible to feelings of weakness and defeat. Financial insecurity can undermine our basic psychological need for high self-esteem and low stress. The absence of these basic psychological needs can lead to financial frauds and reckless financial decisions. It’s a vicious circle ; dementia increases financial insecurity, and financial insecurity contributes to the onset of dementia.

This phenomenon could get worse now that COVID-19 has exacerbated wealth inequality at all levels, older adults and retirees included. We will likely observe in the near future a class of retirees becoming even healthier and richer than others because the Covid-19 recession has pushed low-income older workers into premature retirement while their counterparts graduating from the university have kept their jobs and have seen their wealth grow. Therefore, the COVID-19 recession will be approximately one “Tale of two retreats. “It is very possible that the negative effect of COVID-19 on old age inequalities and financial security could also increase the rates and pace of cognitive decline in older people.

The happiness and security of seniors is also related to the way their retirement income is paid, which means that receiving a pension or a lump sum of savings can determine their well-being.

Financial insecurity decreases the mental health of seniors

How you answer the following questions is a good measure of financial distress: Assess your own financial situation in choosing an option.

1. My income is sufficient to meet the monthly expenses and I am completely financially independent.

2. My income is not entirely sufficient to cover my monthly expenses and I have to depend on my family members for some financial support.

3. My income is very insufficient to meet my monthly expenses and I have to depend on my family members for full financial support.

People who picked numbers two and three in India were likely to have lower emotional maturity levels otherwise known as positive mental health. Even though voluntary organizations, like these in Arizona, helping financially insecure seniors when the government doesn’t, reliance on charity can also reduce well-being.

Financial insecurity increases the risk of obesity in the elderly

Americans who are financially insecure and with low socioeconomic status experience more stress, which has been linked to a higher likelihood of obesity and health problems associated with obesity that can lead to financial insecurity . It makes sense, but now there is data. Researchers Wisman and Capehart found that insecurity fuels the desire for foods high in fat and sugar. Which means that people with financial insecurity are more susceptible to obesity. Low social status – via stress – creates a physical compulsion to make poor food choices. Tobesity epidemic one “social error. ”

So, don’t be quick to blame just the increased abundance of unhealthy foods and the decline in physical exertion alone explain America’s obesity epidemic, but it is social and financial insecurity, the stress and feelings of helplessness coupled with growth the availability of foods high in sugar and fat in warehouse stores, fast food and, unfortunately, less smoking all contribute to the increase in obesity in older people of lower status.

Financial insecurity and low social status increase cortisol levels in older people

The famous British studies by Whitehall show that employees at the lower levels of the social hierarchy and who are subordinates have more cortisol and heart disease. Risk of obesity combined with weaker social insurance and safety nets (more precarious pensions, less unemployment, etc.), Americans may be even more at risk of cognitive decline and poor health DUE to their low status economic.

Compared to older men, financial insecurity in older women increases stress and mental decline

The intersectionality of age and financial insecurity, and more specifically, the way the two interact with each other, is likely to be a major contributor to depression, emotional instability, and poor health for women. seniors. The effect is likely to be stronger in older women than in older men, as women have lower status in all phases of life. They experience higher levels of downward mobility in old age – especially in relation to their family and society. In addition, women are more financially precarious. Under these circumstances, it is likely that women would be more vulnerable to cognitive decline.

Lump sums lead to higher levels of financial insecurity and anxiety

Beyond feeling compelled to work or being kicked out of a job, the happiness and security of seniors can also come from the way their retirement income is paid. Having a pension rather than a lump sum can greatly affect well-being. Researchers found that among retirees with the same wealth and income, having an income stream for the rest of their life is associated with higher levels of well-being compared to an equivalent lump sum. that you have to manage to last a lifetime. Simply put, a million dollars divided into regular monthly income for the rest of one’s life is associated with less anxiety – and therefore more happiness – in older people than those who have to manage that same million dollars in the form of lump sum.

While retirement makes people happier, it depends. Retirement without financial security can be detrimental. Retirement in the right circumstances fosters satisfaction because it leads to a greater sense of control over one’s time and therefore less depression. However, a financially insecure retirement leads to higher stress levels and an increased likelihood of cognitive decline. Economist Kevin Bender has found that having sufficient income and retiring voluntarily, rather than being kicked out of work, are the most important determinants of old age satisfaction.

The absence of these basic psychological needs can lead to financial frauds and reckless financial decisions. Weinstein, N., & Stone, DN (2018). Need for depriving effects of financial insecurity: Implications for financial well-being and behavior. Journal of Experimental Psychology: General, 147(10), 1503-1520.

Lack of basic economic security can lead to weakened emotional regulation. A study of the degeneration of emotional maturity in older adults due to financial insecurity D Mukherjee – Journal of Psychosocial Research, 2017 Aging with Financial Insecurity: Social Resilience and Adjustment in Urban Areas of the United States Nelia Rakhimova Natural resources forum, 2018, vol. 42, number 4, 227-242

Fast-paced and insecure markets are stressful. Obesity can be measured objectively and is hard to hide, but disorders like stress and anxiety are not easy to identify, diagnose and observe. Only a few studies establish a link between stress and market liberalism. Richard Sennett did in ‘the hidden wounds of the classroom’ (Sennett and Cobb, 1972). For forty years, scientists have explored the link between stress and insecurity to explain many poor results, including obesity. And obesity could be the visible measurable signal of other “less visible disorders”. “Avner Offer, Rachel Pechey, Stanley Ulijaszek,” Obesity in wealth varies across welfare regimes: the effect of fast food, insecurity and inequality, Economics and human biology Volume 8, number 3,2010, pages 297-308,

Economic insecurity can lead to obesity. Wisman, JD and Capehart, KW (2010), Creative destruction, economic insecurity, epidemic stress and obesity. American Journal of Economics and Sociology, 69: 936-982.

CRS Report to Congress. Obesity in Older Americans February 6, 2008 Andrew R. Sommers Public Health and Epidemiology Analyst National Social Policy Division.

Stress leads to heart attacks. Kumari M, Shipley M, Stafford M, Kivimaki M: Association of diurnal salivary cortisol patterns with all-cause and cardiovascular mortality: results from the Whitehall II study. J Clin Endocrinol Metab 2011, 96: 1478-1485. Et Pahuja, R., Kotchen, TA Salivary cortisol predicts cardiovascular mortality. Curr Hypertens Rep 13, 404-405 (2011). July 27, 2011

Choosing to retire and have a secure income makes retirees happier. Bender, Keith A., “An Analysis of Well-Being in Retirement: The Role of Pensions, Health, and Retirement ‘Volunteering.” Journal of Behavioral and Experimental Economics flight. 41 no. 4 (2012): 424-433.


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