February 13, 2014
You and I are about to confront two grave threats to our financial future: (1) a decline in our ability to handle our money, and (2) a stubborn denial that number 1 is really happening.
Don't just take my word for it. Take this short quiz that measures basic financial skills. I took the quiz and aced it. But I'm a financial planner, and, at 56, I'm at the peak of my financial competency, according to a study based on this quiz by Michael Finke and Sandra Huston of Texas Tech University and John Howe of the University of Missouri-Columbia. Financial-acuity scores drop by about a percentage point every year after age 60, the study finds. Troublingly, financial confidence increases. And the older we get, the bigger the gap between our perceived and actual skill levels.