Yes, our cognitive ability will start to go as we age… I have read something about a number after which your decisions may be less than ideal.
How do we plan for that? It will be important to have wills and end of life / estate planning set up before reaching that age. It will also be important to have an investing plan that is well tuned by that time, and a good general plan for what retirement and elder care will look like. I should have a deadline to get all the big decisions done -- maybe 60? Many people older than that struggle with big, complex decisions regarding retirement and their health insurance / health care plans.
There are brain exercises that can help prevent loss of mental capacity -- keep your brains active and working for as long as you can!
Fun stuff, huh?
Indeed.
I believe both Nords and clifp have commented on this fact, either regarding an older relative or setting things up for themselves so they don't have to rely on future, potentially unreliable, versions of themselves to handle complex financial matters.
Links? I looked earlier in this message and found no activity by either user.
My father & grandfather have a 30-year history of screwing over the next generation with dementia-related neglect. Four years of unopened mail (including stock dividend checks) piled in a bedroom... not paying any bills or filing any tax returns for four years... a briefcase in the trunk of a car, filled with bearer bonds and jewelry and other contents of a safety-deposit box... filing statements and hard-drive printouts in a cabinet for over 30 years of useless records... not sharing financial info until they no longer have the memory to do so... scrambling to get to the ICU after life-saving trauma surgery, hustling to find a full-care facility after the hospital recovery, and then spending nine more months (and thousands of dollars in legal fees) to achieve conservator & guardian appointments.
Today my father's care (and his finances) are down to a routine, but at least monthly there's a physical or medical or bureaucratic crisis that takes a day or two of phone calls and paperwork to resolve.
Here's a few posts with more details:
http://the-military-guide.com/2014/05/29/the-pitfalls-of-your-parents-finances/ (Read this first, and then read the related links at the bottom of the post)
http://the-military-guide.com/2012/09/24/geriatric-financial-management-update-2/http://the-military-guide.com/2014/12/18/wont-buy-long-term-care-insurance/I've decided that I'm not screwing over the next generation, and this time I really mean it.
First there's the account data and passwords. My spouse is familiar with all of it and knows where to find whatever she needs. I update it every few months and we review it a couple times a year. If both of us die during the same epic surfing session then our daughter knows where to find the emergency file. It'd take her a week or two to have the military leave and transportation to get her hands on it, but everything will perk along fine without any attention for a few months.
I also have a separate file with all of my blogger & social media passwords.
All of our monthly bills (including credit cards) are in autopay. (I write two checks per year for property taxes, but the state should update that in the next few years-- or we'll pay the online fees.) By the time I turn 60 (in 2020) we'll have simplified and streamlined our accounts. This includes transferring our TSPs over to our IRAs and converting those to Roths-- no RMDs required. Nothing needs to be done to our taxable accounts--ever. I have a few pesky angel investments that may cash out before 2020 (or go out of business) but I'm not starting any new financial projects.
When my spouse turns 60 (in 2021) and starts her Reserve pension, I'm turning all the financial management over to her. (As she's pointed out, there won't be much left to actually do except review the monthly statements for identity theft.) All the financial accounts will have her e-mail address, not mine. She'll get to open the postal mail. She'll get to decide whether to spend the income or buy another CD.
We'll keep managing our rental property by ourselves and we'll keep doing our own tax returns, but we'll pick "succession" management firms and CPAs to step in if necessary. Our wills and medical directives and the other paperwork are fine, but in 2021 we'll also establish a revocable living trust with our daughter as contingent trustee (in case of disability or dementia). She can step in to manage the finances without having to seek the probate court's permission.
As my spouse ages (with or without me around to help) she'll turn everything over to our daughter. It's a lot easier to do that if our daughter chooses to live on Oahu for the rest of her life, but that's not critical.
As for me, I'll keep up my cognition by writing as long as I
can't shut up have something to say. I'll also keep paddling out as long as I can remember how to paddle back in.