ABSTRACT Recent research has demonstrated that decision‐making competence (DMC), a latent construct reflecting individual differences in rational thought, is predictive of real‐world decision outcomes at various stages of life. This construct has been shown to be associated with concurrent and retrospective accounts of health‐risking behavior, but its predictive validity has yet to be demonstrated. In the present study, we examine this issue using a 2‐year prospective, multiple‐informant design. Specifically, we tested the degree to which preadolescent DMC (PA‐DMC) obtained at ages 10–11 years (Time 1; N = 101) predicted both self‐reports and caregiver reports of emotional, behavioral, and peer‐related difficulties obtained 2 years later (Time 2; N = 76). Holding variables such as numeracy and inhibitory control constant, lower Time 1 PA‐DMC scores predicted greater reported Time 2 psychosocial difficulties (i.e. peer, conduct, emotional, and hyperactivity/inattention problems). Additionally, higher PA‐DMC scores were associated with greater self‐reported prosocial behaviors at Time 2. These results highlight the utility of testing individual differences in rational responding. We discuss the potential for improving children's decision‐making processes. Copyright © 2014 John Wiley & Sons, Ltd.