Do complex personal balance sheets saddled with debt create potential issues for aging households in the US? A new report by the Boston College Center For Retirement Research examines whether assistance is necessary for older Americans to help manage their financial assets. The report addresses the decline of cognitive skill with age and analyzes how middle-age adults make fewer financial mistakes than younger or older adults.
According to the Survey of Consumer Finances (SCF), households with a head age 65-74 had a median net worth of $239,400 in 2007 which includes home equity. As older adults enter retirement with significant leverage from real estate debt, consumer loans and credit card debt, they are beginning to rely more on their children for advice, guidance and assistance to manage their complex financial situation. When family assistance is not available, the brief identifies possible solutions such as specific policy strategies and better financial education. Will a “personal finance drivers license” be necessary?
For the brief, see “What is the age of reason?”