11 ways to protect your money, and sanity, as you age

As an old financial goat, I often get questions about aging from clients, seminar attendees and readers — even by email. I've no wondrous wisdom, but here are my 11 most offered tips that I sense few undertake:

1. Take seriously the need to finance a long life: You’ll likely live lots longer than you expect. Lifespans keep increasing and will continue to. In 1952 expectancy averaged 68.6 years. By 2006 it was 77.8. If you and your spouse are 65, odds favor one of you hitting 90. Maybe older! Invest as if you'll reach that milestone. Doing otherwise invites aged poverty. Little is more brutal.

2. Be clear early about family-support limits: Before it arises, decide with your spouse the limits on what you will and won’t do to support family members. Too much or too little causes bad outcomes. If the topic of support comes up, and you didn’t plan in advance, you will be too emotional and likely over or under give. Planning early saves relationships later.

3. Consider downsizing: Saves money, makes life more manageable, eases future burdens on offspring, but causes more upfront hassle and reduces guest potential (which may be good).

4. Consider upsizing: Big gatherings, room for lots of grandkids (nothing beats grandkids — get your kids to have more, which is the best tip of all). Negatives are higher cost and extra upkeep.

5. Consider moving closer to grandkids: Fun. And maybe you can coerce your no-good kids to do more for you. And if your kids are good — you will want them helping you as you age. All good.

6. If you can, involve offspring in your financial decisions: This requires that they are up to it. But the more you can do this, the less hostility will arise over time. And, as per above, you likely want and need their help eventually. Plus, you’ll learn a whole new side of them.

7. Drive the safest car you can: When I was young I hot-rodded. Now I know I can’t drive as well as I could (or thought I could). Time is against you. It only takes one idiot to ruin your life. That idiot could be you. My wife and kids were saved by her Volvo in the ‘80s in a head-on with a drunk. I came to love Volvo real fast. Cars are even safer now. Opt against the road idiot.

8. Build a cushion into your financial plan: Not everyone is highly disciplined about spending and planning. If you suffer a big gap between plans and realities, it causes anxiety — which makes for worse investors and hence worse results. Create an extra cushion year by year so at the end you aren’t trying to catch the ball with extremely shaky hands.

9. Know your net worth but don’t obsess over it: J. Paul Getty, when America’s richest man, famously said that really rich people hadn’t a close clue what they were worth because they owned illiquid assets that were impossible to price. If you aren’t rich, obsessing over exactly what you’re worth makes even less sense. Your sense of net worth is just a planning tool for the future.

10. Have a financial back-up person — or two: Whether you, a loved one or a professional, be clear who should oversee your finances if you’re numero uno choice can’t. If you ever need it, that decision made in haste and emotion could be as expensive as any. 

11. Remember that anger slays: I got huge peace of mind when a psychologist buddy taught me to live my actions as if I’d live forever and my emotions as if I knew I’d be dead in 30 days. Every time I anger, I ask myself if I’d waste time over “this” if I knew I had only 30 days to live. I never do. It’s calming. Anger slays investors and you.