I recently came across a piece entitled, “Get a Midlife,” by Patricia Cohen writing in The New York Times Sunday Review. She begins her article by stating:
“YOU may be surprised to learn that when researchers asked people over 65 to pick the age they would most like to return to, the majority bypassed the wild and wrinkle-less pastures of their teens, 20s and 30s, and chose their 40s.”
I was indeed surprised because the best time I would like to return to is right now, in my mid-sixties. But that’s me!
In her article, Cohen referred to research done on the way midlifers handle their finances. It seems that midlife is our best time for making financial decisions.
“Both sexes will find that their judgment, particularly in regard to financial matters and politics, reaches a high point in middle age. In a 2010 article for the Center for Retirement Research at Boston College, economists who studied how different age groups handled 10 different financial transactions involving car, home equity and mortgage loans as well as credit cards found that people between 43 and 63 were best at sizing up the options and choosing well.”
Researchers in the 2010 article Cohen refers to did a small-scale of cognitive decline in older people. I wrote about this phenomenon, called MCI or mild cognitive impairment, in my December 30 post, based on Pat Huddleston’s book, The Vigilant Investor. As we age, we lose the ability to make effective financial decisions. What can we do about?
The researchers offer several interesting “political” ideas: financial “driving licenses,” mandatory advance directives, and regulatory approval (see the article for details.) What interested me most was their mention of need for better financial education and better input from advisers and family members.
On my new website dealing with money and midlife, launching at the end of January, I see myself offering incisive tips and strategies for improving financial decision-making for mid lifers and beyond.