An Uncomfortable Truth About Aging and Retirement Planning

My Comments: My wife and I are now far past the traditional retirement age. She, however, continues to run the household with few changes from how she’s done it for over 50 years. Despite a recently fractured hip, she’s making every effort to keep it all going.  

I, on the other hand, have slowed down. Yes, I still attempt to engage myself as the financial professional I was for over 40 years. Some days it makes sense and other days, not so much, but there’s only so many books you can read or TV programs worth watching.

Are there things I would have done differently? Most definitely, but we all tend to make what we think are the best possible decisions at the time with whatever we have to work with.

I encourage you to read the words that follow. Regret is an uncomfortable state to be in. Knowing in advance what must be done and then doing it limits those inevitable times when things become unglued.

by Michael R. Panico, CFP \ 1 DEC 2020 \

Financial planning isn’t rocket science. Given enough spare time and discipline, anyone can learn the basic tenets of retirement planning: diversify, mind your taxes, prepare for unexpected events, draft proper legal protections, etc. I promise it’s all out there online.

Many people may still find benefit in hiring a financial planner. It may be a good move if you don’t have the interest or spare time. Others may need professional help for the guidance and discipline. There’s also great value in the knowledge and experience that a planner acquires over time.

But there are plenty of do-it-yourselfers, too. They take pride in handling all these burdens directly. There’s something they need to understand: Even if you’ve got the time and discipline to do your own planning, you’re still engaged in a losing battle with Father Time. That is, on a long enough time horizon, you’ll probably have no choice but to get outside help. The problem is that by the time you get to this point, it may be too late to realize it.

How’s Your Driving These Days?

No doubt it’s uncomfortable to ponder the many physical and cognitive declines that come with age. But there’s no denying that we become increasingly dependent as we grow older. As it relates to your money, ignore this risk at your own peril.

Sooner or later someone may have to take away your car keys. If not a family member, it could be the state. Many states impose stricter rules concerning driver’s licenses once motorists get beyond age 70. And with good reason, the Insurance Institute for Highway Safety found that people over the age of 70 are more likely to crash their car than any other age group other than drivers 25 and younger.

Further, because older drivers are more susceptible to injury, they’re more likely to suffer severe injuries or die.

We’ve all observed seniors who clearly have diminished vision, hearing and reflexes. We restrict their access to the road, not only for their safety, but our own as well. It’s sensible for society to impose these restrictions. But cognitive problems are trickier to spot, and less impactful to society, so there are fewer safeguards in place. You’re on your own.

And that’s where the trouble starts. The average do-it-yourselfer is going to hold their talents in high regard, otherwise they wouldn’t dare tackle all the breadth of personal finance. Sadly, that talent is on track to diminish.

Gradual Declines Are Tough to Spot

It’s said that there are two types of intelligence. The first, crystallized intelligence, is where seniors have an edge. Your crystallized intelligence is the sum of your life’s experiences and knowledge. The second type is fluid intelligence, and here’s where time works against you. Fluid intelligence is our ability to think through problems logically in novel environments. According to studies, our fluid intelligence amidst an ever-changing financial landscape may diminish by as much as 1% for each year after age 60.

Let’s not get too defensive here. Plenty of us will still be “sharp as a tack” well into our golden years. But we’re all reminded in little ways that our bodies and minds ain’t what they used to be. I know I struggle with intermittent backaches and find it takes longer to trim down for bathing suit season. I didn’t have these problems when I was 20. You probably didn’t either, right?