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Dollars and Dementia
Old 11-23-2009, 03:12 PM   #1
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Dollars and Dementia

Interesting article on making investments decisions and aging. At age 65, I'm on the down side. I guess I'd better step up my spending so that I can enjoy my stash while I can appreciate it.

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The tension between these two forces means that the sharpness of our financial decision making rises and then falls over the course of a lifetime, like an upside-down U. The authors of the paper even put a number on the peak of that upside down U: 53.
That's the age, on average, where people's increasing experience begins to be outweighed by the inexorable deterioration of all parts of the human body -- including, of course, the brain. As the baby boom generation heads toward retirement, there will never have been so many people with so much accumulated wealth heading into such an extended period of cognitive decline.
What does it mean for society? And what does it mean for individuals hoping to make sure that they and their families are taken care of?
In the paper "The Age of Reason: Financial Decisions over the Life-Cycle with Implications for Regulation," behavioral economics expert David Laibson and his co-authors find that the prevalence of dementia among Americans "explodes" after age 60, doubling every five years. By age 85, more than 30 percent have dementia. For Americans between the ages of 80 and 89, roughly half have dementia or a diagnosis of "cognitive impairment without dementia."
peak-age-of-financial-reason: Personal Finance News from Yahoo! Finance
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Old 11-23-2009, 03:18 PM   #2
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As the baby boom generation heads toward retirement, there will never have been so many people with so much accumulated wealth heading into such an extended period of cognitive decline.
I can see the shysters who prey on the elderly licking their chops...
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Old 11-23-2009, 04:19 PM   #3
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Originally Posted by mickeyd View Post
... I guess I'd better step up my spending so that I can enjoy my stash while I can appreciate it.
....
Sounds like a good plan; or is that a test, if I agree, I'm over-the-hill?

Where else but SmartMoney would you see this:

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When it comes to handling your money, do you get smarter every year? Do you get smarter for a while and then level off? Or do you get smarter for a while, hit your peak, and then get less smart every year after that?
According the the NY Times crosswords which get harder each day, I get less smart as the week progresses and then smart again on Monday. TG Itís Monday. Iím trying to get more into computer tech stuff while I can for Iíll never see age 53 again.

But yes, I have been simplifying my accounting, gradually getting rid of some of the smaller accounts.
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Old 11-23-2009, 05:00 PM   #4
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I can see the shysters who prey on the elderly licking their chops...
You should have seen the attempts of the unscrupulous to separate my late mother from her money. For example in her nineties she constantly (every few days) got snail mail letters from supposedly hardworking, honest young students who just needed ten thousand to pay for books and that sort of thing. It's the equivalent of the Nigerian e-mails for lowlife, waste-of-oxygen scumbags who choose elderly targets.
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Old 11-23-2009, 08:15 PM   #5
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Might be a good time for an immediate annuity. I haven't really considered how I'm going to deal with this problem yet. Though it doesn't seem too hard to sell a bit once in a while. The AA is set, and I don't HAVE to play with it like I am now.
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Old 11-24-2009, 09:34 AM   #6
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You should have seen the attempts of the unscrupulous to separate my late mother from her money.
I ran into the same thing with my mother. Fortunately she had the presence of mind to develop the tactic of saying "give me your phone number and I'll discuss this with my fraud-detective son, and I'll get back to you". Invariably they hung up without leaving a number.
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