…Baby Boomers Will Live Long But Might Not Prosper?
“A recent research paper, Risks in Advanced Age,
by Michael Guillemette, a professor of financial
planning at Texas Tech
University, outlines why it makes sense for older investors to pay attention to the risk of cognitive deterioration.
people exhibit a decline in cognitive abilities over
time that leads to a
decrease in investment performance and
financial literacy skills as they age. Older investors also prefer more certainty, meaning lower
equity exposure, which could be a problem with
increased time horizons and the need to keep up with inflation over the
long haul. It’s also
difficult for older people to see their own decline
in financial skills and
abilities. Finally, wealthy people have been shown to have longer life spans
than less wealthy
people, meaning they
will have to invest for a longer period of time.
So in some cases, retirees could prove to be their own worst enemies when trying to navigate the financial markets.
Here are some ways
baby boomers can
protect themselves from the risk of cognitive decline as they age.”