At what age are you too old to manage your money?
I was fascinated to read an article with the above title that was published recently. It was accompanied by a picture of an elderly couple and their caregiver walking with canes.
The article reflects many of our own observations. We have been managing money for people for over thirty years. During that time we have seen the effect of age and ill health on the people we work with.
Here’s the good news:
“Most people who don’t suffer from cognitive impairment can continue managing their money in their 70s and 80s, according to a report just published by the Center for Retirement Research at Boston College (CRR). But of course some older Americans, and especially financial novices who take over money management after the death of a spouse, will need help …”
Here’s the bad news:
As we get older our ability to process information slows down. As a result, the elderly are more likely to be defrauded or abused by financial scams. They may not open their mail regularly, have problems paying bills and fail to read and understand their financial statements and reports.
If you’ve never made investment decisions, paid the bills, balanced the family checkbook or reviewed the investment accounts you are especially vulnerable. This if often true of older couples in which the wife managed the household and the husband managed the family finances.
As we get older, there are a few basic things that we should do to protect ourselves and our loved ones.
- Have a spending plan for your retirement years.
- Make sure that your spouse and your financial advisor knows about the plan and knows where your accounts are so that they can be monitored for fraud or abuse.
- At some point you or your spouse should agree to transfer your responsibility for managing your investments, and make sure that both members of a couple should know how to run the household finances.