Aging Investors: Top 3 Reasons Why Do-It-Yourself May Not Be The Answer

Contributed by: Sandra Adams, CFP® Sandy Adams

The demographic shift is underway.  A whopping 10,000 Americans are turning 65 each day – a trend that will continue for the next 15 years.  And Americans are living longer than ever. At the same time, the chance of being affected by dementia doubles every 5 years after age 60. Even those without dementia have a 30% of being affected by cognitive impairment without dementia by the time they are in their 80s.  And on top of all that, fluid intelligence – our ability to analyze new information and concepts (especially numbers and financial concepts) – begins to decline after our peak years between ages 30 and 40. (American Association of Individual Investors Journal September 2011).  

Particularly in the area of investment management, there are a number of risks to aging investors.  Here are some of the top risks and why it makes sense to consider working with a financial planning partner in the investment area to avoid these risks.

Reasons to Consider Working with a Financial Planner

  1. Fraud/Undue Influence – one of the biggest risk factors as you age is that becoming a primary target of financial frauds and scams.  Someone may want to steal your identity, sell you inappropriate financial products, or family members or others my attempt to steal from you.
  2. Diminished Ability to Make Decisions or Understand Concepts - this occurs when you -- whether due to dementia, cognitive impairment, or normal aging -- begin to struggle with understanding numbers or financial concepts.  Now, more than ever, you need a professional fiduciary to watch out for your financial best interests rather than trying to handle investments on your own.
  3. Primary Decision Maker becomes incapacitated and spouse has no game plan or is caregiver and cannot handle another task – generally, there is one partner in a marriage that primarily handles the investments.  If that person becomes incapacitated and the spouse is not up to speed, and doesn’t know “the plan,” it is important that there is a professional financial planner involved. With a financial planner working as your partner, they can help you keep things running smoothly and make sure that the investments are handled appropriately to meet your long term care and retirement needs. This is especially important if you are also the primary caregiver for your spouse and already dealing with added responsibility.

For many reasons, it is important to work with a financial planner.  Particularly as an aging investor, it is crucial to have a financial planning partner to help protect you and your family against financial predators, to make sure appropriate decisions are made, and to help relieve the burden of yet another responsibility that you might have in the aging process.  Make sure a CERTIFIED FINANCIAL PLANNER® professional is part of your professional planning team. 

Sandra Adams, CFP® is a Partner and Financial Planner at Center for Financial Planning, Inc. Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In 2012-2014 Sandy has been named to the Five Star Wealth Managers list in Detroit Hour magazine. In addition to her frequent contributions to Money Centered, she is regularly quoted in national media publications such as The Wall Street Journal, Research Magazine and Journal of Financial Planning.


Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Sandy Adams, CFP® and not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. You should discuss any legal matters with the appropriate professional. Investing involves risk and investors may incur a profit or a loss.