While the saying “with age comes wisdom” surely applies to many of life’s topics, it appears to not apply to financial wisdom, according to a retirement planning article “Financial Acumen Declines After 60” from Wall Street Journal.
The financial literacy of Americans over the age of 60 decreases each year with age. The study discussed in this article found that overall financial literacy fell about 2% each year after age 60. People in their sixties financial literacy scored about 59%, and people in their eighties score dropped to 30%
With age comes wisdom… right? According to this article, people’s confidence their ability to make financial decisions increases, but the same cannot be said about financial wisdom.
“We are not older and wiser. Rather, we are older, less smart and overconfident.”
This financial literacy study was not just given to the sixty and over population. It found that all Americans on average are financially illiterate.
The findings suggest that Americans reach their financial literacy peak in their forties and suggest that planning decisions for your financial future should be added to your to do list while your financial decision making abilities are strongest.
“Bottom line: Don’t delegate your financial decision-making to the 85-year-old version of yourself, who may not be as capable as the 65-year-old version.”
Follow the link below to read the Wall Street Journal article by Robert Powell, published Oct 30, 2011: http://online.wsj.com/article/SB10001424052970203554104577001573761681852.html?mod=WSJ_RetirementPlanning_RetirementPlanning_2
