How to Make Good Financial Decisions as You Age
A study that researched the life-cycle patterns of financial mistakes found that we reach our best financial decision-making powers around the age of 53. Using a database measuring ten types of credit behavior, the study discovered middle-aged people make the fewest financial mistakes as compared with those older and younger.
According to the study profiled at Investopedia.com, the ability to make good financial decisions rises when we are in our 20s and 30s, peaks when we reach our 50s, and then falls sharply once we hit our 70s and 80s.
However, the study also says that by maintaining cognitive function, you can better your chances for continuing to make good financial decisions as you age, since it is declining cognitive function that robs us of our financial decision making abilities.
Maintaining cognitive function can be achieved through keeping physically fit, engaging in mentally stimulating activities, eating a healthy diet and staying socially active, according to researchers. Smoking, drinking, eating a high fat diet and lack of sleep all contributes to a decline in cognitive function.
Early financial planning also helps you make good financial decisions as you age. Engaging a trusted estate planning attorney to assist you with executing a will and other estate planning documents as well as implementing asset protection strategies can offset any of the negative effects of aging on making good financial decisions for you and your family.
