Here’s the Age When You Make Your Best Financial Decisions
Written by
Laura Beck
Edited by
Levi Leidy
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We all hope to make wise money moves throughout life, avoiding major missteps that could impact financial security. But could there be an ideal age bracket where people actually reach peak financial decision-making abilities? New research reveals that for most, their 50s bring the highest financial literacy and least errors when managing personal finances.
Hitting Their Stride at 54
A 2022 study led by economist Rafal Chomik examined financial literacy across age groups. Financial literacy refers to understanding money management basics like inflation, interest rates and portfolio diversification. According to the results, financial literacy peaks at age 54 on average then slowly declines from there.
Chomik’s research team gauged literacy using questions like: “If in five years your income has doubled and prices have doubled, will you be able to buy less, the same or more than today?” (The answer is the same.)
Why the Mid-50s Bring New Focus
“The reason people start making better decisions is because of fear,” said Steve Davis, CEO of Total Wealth Academy. “They are coming to the realization, a little late, that they are getting old and retirement age is coming on quickly.”
With major life milestones looming, many feel motivated to shore up their money skills. But some make critical errors like underestimating lifespan or leaving planning too late. By understanding key reasons why financial wisdom peaks in the 50s, younger people can reap the same benefits earlier.
Never Too Early To Gain Money Smarts
“Part of the problem is that our educational system teaches us nothing about building wealth,” Davis shared. “It is up to the individual to learn about money and wealth.” Rather than leaving it until their 50s, he advises developing financial literacy as early as possible.
Money manager Vijay Marolia, the co-founder of The Cash Square, agrees age itself doesn’t equate to wisdom. “Anyone can make good decisions with money as soon as they learn about it. And that’s the real issue — the teaching system has ignored the basic and necessary subject for decades,” he noted. Marolia believes adopting healthy money habits like saving, budgeting and investing in your 20s and 30s leads to better lifetime outcomes.
While the 50s bring a sense of urgency for many to improve financial skills, the research shows it’s never too soon to gain money smarts. Learning core concepts early helps you make sound choices well before typical peak ages. With the right foundation, your 50s can build on existing strengths rather than playing catchup.
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