Causes and Consequences of Financial Mismanagement at Older Ages

Reposted from the TIAA Institute. Research by Martha Deevy, Annamaria Lusardi, and Olivia S. Mitchell.

Poor financial capability in old age can have serious repercussions, causing people to make mistakes with credit, draw down retirement assets too quickly, and fall victim to financial predators.


Older adults are often near their peak level of wealth accumulation, making them attractive targets for fraud. This study looks at elderly Americans’ exposure to financial exploitation, the risk factors associated with victimization, and the consequences for people’s financial security in old age. The research should be of particular interest to financial advisors, insurers, employers, policymakers, and others seeking to improve older people’s financial decision making.

Key Insights

  • Relatively few elderly persons experienced any single form of investment fraud in the five years preceding the study, but 8% did report at least one form of fraud.
  • One-third of those studied indicated others had used or attempted to use one of their accounts without permission.
  • Financial victimization among older adults is not associated with any readily identifiable risk factors.


The researchers designed and fielded an experimental module in the 2016 Health & Retirement Study to determine the incidence level of financial exploitation among the elderly, associated risk factors (such as low financial literacy, cognitive impairment, and depression), and the effect on people’s financial security. A nationally representative sample of approximately 1,260 Americans over the age of 50 participated in the study module.

View the full report here.