One question has long haunted psychologists and economists alike: why do some people consistently make better life decisions than others?

Yes, life can be complicated for anyone, but a new study offers a striking answer: smarter people are simply better forecasters.

Drawing on nearly two decades of data from over 3,900 older adults in England, the new research shows that individuals with higher IQs are significantly more accurate in predicting their future. Their less intelligent counterparts, by contrast, are plagued by judgmental noise and miscalibrated expectations that skew their life decisions.

Smarter people are simply better at assessing the odds of a particular outcome occurring, making it more likely that their decisions favor them.

This edge doesn’t just matter for trivia games or academic tests. It matters for everything from financial planning to health decisions — anything that hinges on understanding the future.

Forecasting Our Own Lives

The study, led by Chris Dawson, a professor at the University of Bath’s School of Management, zeroed in on a deceptively simple question. How well can people predict their own lifespan?

Over the years, participants in the English Longitudinal Study of Ageing (ELSA) were asked things like, “What are the chances that you will live to be 75 or older?” Their answers — with a percentage, from 0 to 100, indicating how likely they thought they were to reach that age — were then compared to actual life expectancy statistics from the UK Office for National Statistics.

The goal wasn’t to see who was optimistic or pessimistic. It was to see who could zoom out and make objective assessments of their lifespan.

The UK Office for National Statistics life tables provide actuarial estimates based on sex, age, and year of how likely someone is, demographically speaking, to reach a certain age.

So if a 65-year-old participant gave himself a 70% chance of living to 80, but the statistical probability for someone like him was 60%, his forecast error would be +10% (overestimation).

People with high IQs, measured through a battery of cognitive tests, made significantly fewer errors in these predictions. Meanwhile, those with the lowest IQs (bottom 2.5% of the population) had forecast errors that were more than twice as large as those in the top 2.5%.

“Accurately assessing the probability of good and bad things happening to us is central to good decision-making,” Dawson said in a statement. “Almost all decisions we make — whether it’s starting a business, investing, crossing the road, choosing who to date — require probabilistic assessments.”

The authors chose lifespan estimates as their baseline test for forecasting ability because these estimates are personally meaningful, probabilistic, and consequential — the perfect combination for studying how people judge uncertain future events.

Genes, Noise, and Judgment

But the study didn’t stop at IQ tests.

Dawson and his team also used genetic data from participants. Specifically, they employed “polygenic scores” linked to intelligence and educational attainment. These scores act like a biological fingerprint of cognitive potential, calculated from thousands of DNA variants associated with mental ability.

Using a statistical technique called Mendelian randomization, the researchers were able to separate correlation from causation. The genetic data confirmed that intelligence is not just associated with better forecasting — it likely enables it.

Because genes are randomly inherited and fixed at conception, they’re not influenced by education, income, or lifestyle. This randomness acts like a natural experiment. If people with higher genetic scores for intelligence also made more accurate predictions, then it’s strong evidence that intelligence itself plays a causal role in shaping how accurately we judge uncertain futures.

In practical terms, a one standard deviation increase in IQ (about 15 points on the classic scale) led to a nearly 20% reduction in forecast errors. People at the high end of the IQ scale had error rates around 12%, compared to over 26% among those at the low end.

Low-IQ individuals were also more likely to make predictions that seemed all over the place. When asked the same question across multiple years, they gave fluctuating answers, often veering unpredictably. High-IQ individuals, by contrast, were far more consistent. Their predictions didn’t just cluster around the right value, they did so reliably.

“Poorly calibrated expectations can lead to bad financial decisions, and reduced economic welfare, which can adversely affect national growth,” Dawson explained.

What It Means for All of Us

Why does this matter?

Because we all live in a world of uncertainty. Whether it’s saving for retirement, deciding when to see a doctor, or choosing a job, the quality of our decisions depends on how well we can weigh risks and estimate probabilities.

IQ has long been known to correlate with life outcomes, metrics such as health, wealth, and job success. This study suggests that part of that advantage comes from the ability to realistically judge what the future holds.

It also raises uncomfortable questions about inequality. If some people are wired to make better decisions, should society do more to compensate? Could we improve public policy by presenting information — like health risks or financial advice — in a way that doesn’t rely on everyone doing their own math?

Dawson suggests that might be a path forward. “Explicitly stating probability estimates on information relating to health and finance, for example, rather than relying on individuals to do their own calculations, could help people prone to forecasting errors to make more informed, accurate decisions,” he said.

The findings appeared in the Journal of Personality and Social Psychology.