投资行为应该随着年龄而变化

Life should be simpler in retirement. So should your finances.

A clear-cut financial plan is a good idea at any age. But a growing body of research suggests simplicity takes on added urgency as we move into our 70s, when stock-picking acumen begins to slip.

Warren Buffett is pushing 80 and still going strong, but many of us mightn't have the luxury of good health or a clear mind in our later years. About half of those in their 80s have some dementia or cognitive decline, and recent research into our financial decision-making skills suggests they begin to slip after age 70 and suffer more rapid declines after 75, much as aging athletes lose speed and agility.

George M. Korniotis of the Federal Reserve and Alok Kumar of the University of Texas business school studied thousands of stock trades made by investors in the 1990s. They found that older investors traded less frequently and held less-risky portfolios, but they also lost their knack for stock picking beginning in their early 70s, enough so that their average annual returns were 3% to 5% less than expected.

That is problematic because investors in their 70s and 80s are less able to return to work and have fewer years to recover from poor choices than younger investors, as many retirees with large stock portfolios learned last year

Similarly, in a just-published paper titled 'The Age of Reason,' four economists studied bank data on several types of loan transactions. They found that people in their 20s and those over 70 were much more likely than those in middle age to make financial mistakes, such as accepting higher-than-necessary rates on home-equity loans or owing fees for paying a credit card late or going over a credit limit.

The economists attributed the mistakes of the young to inexperience, but those of older adults to declining decision-making abilities. That is especially troublesome, they note, because older people have much larger assets, and thus have much more at stake.

Given that we can't know what challenges we may face as we age, the best defense against poor decisions or fraud is a good offense-a simple-to-manage financial plan, put in place well before age 75. Consider these steps:

． Simplify your investments. You don't have to give up being an active investor. But consider ditching individual stocks in favor of easier choices like index funds. Avoid alternative investments and private partnerships that might be hard to sell. Many investment firms, including Vanguard Group, Fidelity Investments and Charles Schwab, will calculate and automatically send you mandatory IRA distributions and offer services that, for a fee, automatically rebalance your investments.

． Pare accounts. Many of us have 10 or more banking and brokerage accounts, or certificates of deposits at several banks. Consolidating makes keeping track of your money much easier. Plus, says Michael Gilfix, an elder-law attorney in Palo Alto, Calif., people tend to underestimate their holdings or forget about accounts, so you may find that you have more than you think.

． Get your paperwork in order. Your Social Security payments are probably directly deposited, and you probably have designated someone to make major decisions if you are incapacitated. But search those shopping bags for important account statements and stock certificates, which should be held at brokerage firms.

． Eliminate debt. The Federal Reserve's 2007 study of consumer finances found that almost half of households headed by someone 65 to 74 years old had a mortgage, and 37% carried credit-card balances. Paying those off frees up precious cash and lessens the worry of forgetting to pay bills.

You may never get that hall closet cleaned out, but straightening up your financial house will simplify your life and help your spouse or heirs if they have to take over.