All of us expect to slow down as we age, affecting many aspects of our lives. Our ability to deal with money is obviously not immune from the relentless march of ageing.
Indeed, a recent personal finance feature in The New York Times points to research over the years showing that our capability to handle our money is one of our first skills adversely affected by age.
Australia's recent 2015 intergenerational report underlines just how our quickly our population is ageing - in line with a trend being experienced in much of the world.
Ageing and money are, of course, are closely related issues. First, we aim to save for retirement and old age while still working. Next, we face the challenges in retirement of protecting those savings as well as managing our everyday budgets when no longer receiving an employment income.
In the NYT feature - As cognition slips, financial skills are often the first to go - journalist Tara Bernard interviews medical, economic and financial planning specialists about the impact of ageing on an individual's capability to handle personal finances.
For instance, neuropsychologist Daniel Marson provides a useful tip to assist an older person you care about: "If you can detect emerging financial impairment early, you can also step in early and protect that person."
Dr Marson has written a paper - funded by the National Endowment for Financial Education and the National Institute on Ageing in the US - giving some "early warning signs of financial decline".
These warning signs include an older person concentrating too much on the potential benefits of an investment and not enough on the risks, and having more difficulty with day-to-day financial matters such as paying bills and calculating restaurant tips.
A decline in a person's ability to handle finances makes them more vulnerable to making poor investment decisions, falling for investment scams, and agreeing to hand over money or control of their finances to unscrupulous individuals.
MoneySmart, ASIC's personal finance website, has a recently-updated feature giving fundamental pointers about looking after money as we age. Significantly, the article discussed the sometimes sensitive subject of family involvement in an older person's finances.
"While it can be helpful to get the opinions of your family and friends on financial matters," according to MoneySmart, "you need to think carefully about giving away any power over your investments. Sometimes older people can find themselves being pressured by family or friends to hand over control of their money or property."
Such concerns highlight why it can be so critical for older people to gain ethical, high-quality and independent professional advice together with the support and guidance of trusted friends and family members.
Advisers can discuss such matters as whether an investment portfolio should be simplified as a person ages and whether their portfolio's target asset allocation is still appropriate given their changing circumstances and expected longevity.
Other issues to possibly discuss with an adviser include estate planning and whether or not to have an enduring power of attorney, which grants authority to another person to make financial decisions on their behalf including if mental capacity is lost.
By Robin Bowerman
Principal & Head of Retail, Vanguard Investments Australia
25 May 2015