There’s an old adage that goes with aging: “Older is wiser.” This means that older people are more apt to make good decisions because of their experience. Moreover, older people are best suited to impart advice because of the roads they have travelled.
While the adage of experience being the best teacher certainly makes sense, is it actually true?
A study conducted by Texas Tech University suggests that one’s cognitive abilities may not allow a person to make the best financial decisions as they grow older.
Essentially, researchers found that the peak age for people to make financial decisions is age 50, with such abilities declining by about 1 percent after age 60. By the time a person reaches age 80, these abilities are significantly diminished.
This also suggests that as people reach their golden years, when they are supposed to enjoy assets that they have been saving their entire lives, they could be at their most vulnerable. Because of this, it would be imperative that as people get older, they should be receptive to having financial advisors in their lives both for estate planning purposes, and as an added layer of protection against financial fraud.
Of course, as people get up in age, they may be less receptive to having someone look over their shoulders with regard to their spending and saving habits. But the difference between what a person knows and what they think they know could leave them at risk for financial fraud.
If you have questions about how estate planning can protect you, an experienced attorney can advise you.