Most of us, if we are in good health, imagine that we will live to a ripe old age. This means that as the older we get, the better we will have to manage our money. Not only because of the specter of outliving our savings, but to make sure that we are not taken advantage of so that we are not robbed of our retirement.
Indeed, we wrote a prior post on how we may be taken advantage of as we age, which begs the further question of whether we will be capable of making good decisions as get older.
It may not be a concern right now, but a Texas Tech University study, suggests that many people’s ability to make sound financial decisions peaks at the age of 50. After this milestone birthday, a person’s cognitive abilities tend to decline by the age of 60, and by age 80, a significant decline can be realized.
Given these potential problems, it is not surprising that adult children and other caretakers may find an elderly loved one’s finances in shambles late in their lives. It is not uncommon for refinancing scams and credit card hustles to befall otherwise prudent spenders in their golden years. Likewise, the potential for family squabbles over an elderly parent’s shortcomings can cause longstanding heartache.
Because of this, it is helpful to educate elders on the importance of sharing financial information. Of course, this does not mean disclosing their entire financial existence; but being smart enough to ask for help and humble enough to accept it could help in avoiding financial problems.