Many financial advisors focus on clients in their prime income-building years. That may be a mistake.
Reason: Clients start losing their financial acumen at age 60 and lose a little bit every year after.
Texas Tech University researchers tested people on their knowledge of investments, insurance, credit and money basics for a recent study.
- Financial IQ drops an average of 2% per year starting at 60
- Folks in their 60s got 59% of the questions right, while
- Ocotgenarians only answered 30% correctly.
Michael Fink, the author of the study, says the scary part is people’s confidence about their financial decision-making rises as they get older, even as their actual skills decline.
Click here for the Texas Tech study.