It's true that as you get older, your brain's processing speed begins to slow, and your memory may occasionally short out, says Margaret Gatz, PhD, professor of psychology, gerontology, and preventive medicine at the University of Southern California. But researchers have recently made some surprising discoveries about what's really happening in our heads as we age: "We are identifying ways in which older minds hold their own against younger ones and even surpass them," Gatz says. Here, 10 ways you get smarter as you go.

1. Your hemispheres sync up.
The brain is divided into two hemispheres, with each side specializing in different operations. Brain scans show that while young people often use only one side for a specific task, middle-aged and older adults are more likely to activate both hemispheres at once—a pattern known as bilateralization. By involving both sides, older people bring the full spectrum of the brain's power to bear, allowing them to make more fruitful connections among the disparate parts of a problem or situation.

2. Your brain never stops growing.
Scientists once believed that some of our brain cells died off when we got older. But it's now clear that we not only hang on to our neurons—we grow new ones, too. Throughout a person's lifetime, the brain is continually reshaping itself in response to what it learns. Even something as silly as a clown trick can alter its structure: In a study published in The Journal of Neuroscience, German researcher Janina Boyke and her colleagues taught 60-year-old adults how to juggle. Afterward, scans of the subjects' brains showed growth in a gray-matter region that processes complex visual information. In another experiment, Swiss neuroscientist Lutz Jäncke studied people who were learning to play a musical instrument. After they had been practicing for five months, Jäncke noted significant changes in the regions of the brain that control hearing, memory, and hand movements, even in participants who were 65 or older.

3. Your reasoning and problem-solving skills get sharper.
This is evident not only in laboratory studies but also in examinations of choices made in real life. For example, according to a study prepared for the Brookings Institute by Sumit Agarwal, an economist at the Federal Reserve Bank of Chicago, the middle-aged make smarter money decisions than their younger counterparts. In particular, they are better at financial transactions like managing their credit card balance and avoiding excess interest rate and fee payments—with the best performance notched by those in their early 50s.

4. You can focus on the upside.
Our outlook grows rosier as we get older, as demonstrated by a study published last year in the journal Psychology and Aging. Laura Carstensen, a professor of psychology at Stanford University and director of the Stanford Center on Longevity, asked a group of subjects ages 18 to 94 to record their emotional states at five randomly chosen times each day for a one-week period. She repeated the procedure with the same participants five years later, and then again five years after that. With the passage of time, the study subjects reported more positive well-being and greater emotional stability. That may have been partly due to changes in how the brain—in particular, the emotion-processing center known as the amydgala—responds to positive and negative events. In a 2004 study, Carstensen scanned the brains of younger and older volunteers as they looked at cheerful, distressing, and neutral photographs. The amygdalae of younger subjects (ages 18 to 29) were activated equally by both the cheerful and distressing images, while the brains of the older subjects (between 70 and 90 years old) reacted much more strongly to the positive pictures.

5. Your people skills are constantly improving.
Mature adults understand themselves well—and they also understand other people, research shows. In a study published in the Journal of Gerontology in 2007, older and younger adults were presented with a series of hypothetical everyday problems (say, for example, an emotionally needy relative calls to talk just as you're leaving to meet up with friends, or you've won a free vacation, but the travel dates would mean missing a long-planned family party). The older adults were especially good at solving such interpersonal dilemmas—often by choosing a path that skirted direct conflict. "As we get older, our social intelligence keeps expanding," explains Gatz. "We get better at sizing up people, at understanding how relationships work—and at not getting into an argument unless we mean to."

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