New research shows pitfalls in seeking immediate gratification and overlooking critical precautions
Traditional wisdom tells us that people grow wiser with age, which means older people tend to be more patient. But according to a new study’s findings, many older Americans aren’t planning enough for the future.
“One reason that older people don’t plan ahead, according to our recent study, is that many of us become increasingly impatient the older we get,” said Olivia S. Mitchell, a professor of insurance/risk management and business economics/policy at the Wharton School of the University of Pennsylvania, said in a column for the Wall Street Journal.
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Mitchell, along with two other academic experts, surveyed a nationally representative sample of Americans aged 70 and above to look at how they approach long-term decision making. They asked a series of questions wherein respondents had to choose between receiving US$100 today and getting a larger sum in 12 months.
“[O]lder Americans are extremely present-focused: on average, they felt that having $1 today was equivalent to having $1.85 a year from now,” Mitchell said. “This is rather astounding, since virtually no one can actually hope to earn a one-year return of 85% from saving and investing.”
The researchers found that impatience was more prevalent among the older population than what was previously observed for younger people. They also found a tendency toward more patience among better-educated people, and less patience among those suffering from mental shortfalls.
With regards to provisions regarding their future, Mitchell said impatient people tended to save much less money over their lifetimes. They were also less likely to engage in preventive behaviours like getting a flu shot; undergoing a mammogram, Pap smear, or prostate exam; avoiding smoking; and having less than one drink a day on average.
Somewhat predictably, the least patient people were prone to not setting up precautions for their health and wealth.
“In particular, they are less likely to have long-term care insurance, a power of attorney, a living will, and discuss end-of-life medical care plans with others,” Mitchell said.