Cognitive decline, not age, explains reduced decision-making capacity in healthy older adults

Later life involves critical financial and healthcare decisions, such as how to manage one's income in retirement. With ageing populations and increased individual responsibilities, understanding the impact of healthy cognitive ageing on decision-making is crucial. While the effect of ageing on basic cognitive abilities has been examined widely, its effects on decision-making remain underexplored. To address the latter, we conducted a large (n = 357), pre-registered online experiment comparing decision-making and basic cognitive functioning between younger (18-30) and older (65+) adults. Older adults made significantly lower quality decisions. The decline in decision-making capacity is primarily explained by lower performance on tasks of basic cognitive abilities and not age, education, or motivation. Despite investing more time, older adults explored fewer decision options and were more overconfident. These findings suggest that healthy cognitive ageing impairs decision-making capacity due to cognitive decline, with important implications for policy and choice architecture design, particularly in ageing populations.