Fluid vs. Crystallized Intelligence: How Aging Changes Mental Processing

Even the healthiest among us will experience declines in the speed at which we generate, transform and manipulate new information as we age. This type of mental processing is called fluid intelligence. And it is only one part of the story.

Another type of mental processing, called crystallized intelligence — the accumulation of knowledge and experience (you might call it wisdom) — increases until about age 60, where it plateaus until about age 80, and eventually drops off. While fluid intelligence enables a younger person to more quickly calculate a tip on the fly, an older person’s crystallized intelligence might help him or her perform better when analyzing stock performance and market trends.

In just 15 years, 1 in 5 Americans will be 65 or over. Understanding how normal aging hinders (and helps) in financial decision making is crucial to ensuring Americans’ financial wellness in the coming aging boom. How can financial products and processes be designed to work to an older person’s strengths? Building in extra time for seniors to process information and cooling-off periods to assess financial decisions could be a start.

Click on image to expand graphic.

Information graphic related to mental processing during the buying process.

See the full Summer 2016 Digest or download the PDF.


  • Paul Golden

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