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Financial Planning > Behavioral Finance

Dear Future Me: Please Listen!

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Bob Dylan hit on a universal truth when he sang about his son and the attraction of remaining young.

May your hands always be busy

May your feet always be swift

May you have a strong foundation

When the winds of changes shift

May your heart always be joyful

May your song always be sung

May you stay forever young

Dylan’s voice was best described, famously by Joyce Carol Oates, as if sandpaper could sing, but he was, according to Time magazine, “the guiding spirit of the counterculture” and the voice of his generation. Today that generation—my generation, the baby boomers, including Dylan—isn’t young anymore. And none of us is going to defeat Father Time. As Dylan’s friend John Mellencamp sang in “Life is Short Even on Its Longest Days,” “one day you get sick and you don’t get better.”

Those of us lucky enough to live so long will see our bodies and minds slip and in many cases slip badly. Studies confirm what most of us have seen among our families and friends, even if we’ll never admit it about ourselves. The ability to make effective decisions declines with age. Thus those age 60 and up unnecessarily lose nearly $3 billion to fraud annually. To put it starkly, the research shows that financial literacy declines by about 2% each year roughly after age 60.

Despite that decline, our self-confidence in our financial abilities remains undiminished (and may even increase) as we age. I’ve seen it personally (and tragically). The aged and infirm drive too long, buy too many needless things from the unscrupulous, and simply aren’t as good at making decisions as they once were. As cognitive impairment increases, the aging remain certain that they’re really OK and become belligerent when anyone suggests otherwise. We all like to think we’re highly competent and desperately want to maintain our independence. Trying gently to let aging loved ones know that they need help can readily turn into an ugly confrontation.

In 1999, David Dunning and Justin Kruger published a paper that documented how, in many areas of life, incompetent people do not—cannot!—recognize just how incompetent they are, a phenomenon that has come to be known as the Dunning-Kruger effect. Subsequent testing has shown that people who don’t know much tend to grossly overestimate their prowess and performance in a wide variety of areas, including logical reasoning and financial knowledge. Aging makes that tendency even worse. Thus, for example, elderly people applying for a renewed driver’s license overestimate their driving competence by a lot.

This seemingly inevitable conflict between the aging and those who love them about the extent and nature of the mental decline and what should be done about it plays out horribly every day among families of every sort. New Orleans Saints and Pelicans owner Tom Benson, who is 87, was recently ordered to undergo a mental evaluation by three different doctors despite his strenuous objections, to decide if he remains competent to control his businesses and to make decisions in litigation brought by his daughter and grandchildren.

Not surprisingly, the dispute centers upon a much younger new wife and Benson’s decision to fire his daughter and grandchildren from their long-held positions with his companies, cut off contact with them and disinherit them (to an extent). The results of the examination are to remain secret (appropriately) and we cannot know how true the various allegations are. But this sort of fight is all too common.

Benson maintains that he is still sharp and in control. He may well be. His children and grandchildren say that he’s not what he once was and is under the sway of a much younger wife who is not their mother and grandmother. They may be right. They may all be right to an extent. The one certainty is that it is a major mess—an ugly and expensive mess that we’d all like to avoid.

Note to Self

So I’ve spent a good deal of time thinking about what I might do to limit the chances that I will fall prey to this dreadful decline scenario. Since I am fortunate enough to have the opportunity to write this column, I’m writing this particular column with a very specific purpose. In effect, I want this column to serve as a letter to my future self. Since I’m blessed with children who are smart, honorable and financially literate, this is a reminder to my future self simply to listen to them and to keep listening to them when they tell me I need some help.

By way of this column I’m asking them—begging them—to show me this column if I resist them in any way. Since psychologist Hal Ersner-Hershfield has found that those who most identify with their future selves do a better job planning for the future, this exercise should help even if I (wrongly) ignore this column and my children’s advice in the future. But, more than that, I’m hoping and praying that this column—put in front of my face and read aloud if necessary—will be enough to convince my future self to listen to the people who love me when they (I hope gently) let me know that I could use more help than I’m allowing.

So Bob, when the kids tell you to stop driving, give them the keys. When they tell you to run major decisions past them, set up a system that enforces your cooperation (requiring a co-signer on checks for example). When they tell you to consider whether you ought to keep living without help, look into getting care or moving to an assisted living facility (and take their advice as to which option is best). When they—horror of horrors—offer financial advice, take it. You have three fantastic kids who have made you proud every day of their lives. Trust them to watch out for you and to love you, even when you don’t like it.

Matt Sly and Jay Patrikios created in order to store and deliver self-addressed emails on whatever far-off date the emailer chooses. The book “Dear Future Me” includes some especially compelling ones. For example, an Alzheimer’s patient emails his future self regularly in order to try to maintain some sense of continuity. A common theme is the presumption that our future selves will have more courage and more willpower, that we’ll be better and smarter. As if.

But every reader can write a letter like this to his or her loved ones and guardians to show to their future selves. I encourage you to send a copy to too. When the time comes, odds are we’ll reject the help we need when we need it most. We need to do what we can to prevent that from happening. Maybe this column or a letter to our future selves will help.

Dear future me, as much as it may pain you, listen to your kids and the people who love you. Please.

— Check out Investing and the Aging Brain: ‘What Do I Do When I Get Stupid?’ on ThinkAdvisor.


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