What does your frugality quotient show? Does it increase as you grow older? Or do you feel you’ve reached a point where your frugality has attained a steady level from which it refuses to nudge? Or do you think that you have reached the pinnacle of fiscal enlightenment and are sliding down the slope right now? Well, this is individualistic.

Behavioral economist, David Laibson and associates have conducted a study and released a report on how the levels of monetary wisdom change with age. In their very interesting  paper “The Age of Reason: Financial Decisions over the Life-Cycle with Implications for Regulation” which is yet to be released, they say that though your experience and age help in increasing your fiscal wisdom till a certain stage of your biological growth, with oldage , your fiscal wisdom declines. Understandably, I think our frugality quotient too follows the same path as our other faculties of intelligence. Oldage does have a detrimental effect on our cognitive skills and with the general intelligence losing its sharpness, you can expect any specific intelligence too to decline owing to that. So what does all this mean to us? It means that you’ve got only a certain age in your lifetime where you are at your frugal best and you’ve got to identify that and cash on your financial planning and management skills. A time not earlier or later than this is going to help you in taking the wisest fiscal decisions in your life. If you are waiting to know this magical number –its 53! So make the best of your fifty third year for a good financial future.

After 53 years, senility takes over for most people and that’s when your cognitive skills along with your body start showing signs of inefficiency due to aging. So, if you are on the right side of 53, take care and see to it that you are ready with all your financial resources. Plan for retirement because you’ll not able to organize your money well after you grow old.

According to Laibson, after 60 years of age dementia increases and 30 % of people who are more than 85 years old are suffering from dementia, Most of the elderly don’t seem to be having the cognitive apparatus to manage their finances properly. Hence they are being taken advantage of. As most youngsters believe in a nuclear family set up without their elderly parents living with them, the elderly have to finance themselves during that age to survive.

So what should the aged do to protect their finances? They should make a trusted person the caretaker of their finances. They should keep their financial portfolio simple and invest in safe government retirement policies like the 401(k). You can also make a revocable living trust if you have enough finances. With a little bit of planning, you should be able to protect your financial resources even after you retire. You may not be able to stop the process of aging, but you can certainly take precautionary measures beforehand.

Similar Finance Articles

• Important Numbers to Manage Your Finances
• Real Smartness Is About Money-Smartness!
• Is It Time For A Makeover For Your Financial Portfolio?
• Young Investors, Don’t Let This Recession Dampen Your Spirits!
• Steps To Achieve Your Money Goals