Regardless of age, most Americans are concerned about the aging process – either for themselves or for a loved one.
Resonate shares your concerns. I recently read an interesting article called “6 Warning Signs of Financial Decline and Better Health While Aging” by Leslie Kernisan, MD. I thought she made some important points and hope you find value on the following thoughts.
Dr. Kernisan begins by citing a study from the National Endowment for Financial Education, which was covered in the New York Times. She begins her article by sharing the key warning signs of financial decline from this study.
- Taking longer to complete everyday financial tasks
- Reduced attention to details in financial documents
- Decline in everyday math skills
- Decreased understanding of financial concepts
- Difficulty identifying risks in a financial opportunity
For each of these warning signs, the New York Times lists several specific examples (e.g. taking longer than usual to complete a check register). If you’ve had any concerns about an older person’s financial abilities, I highly recommend you use this list as a guide.
It can be found here.
Now, here are five important things Dr. Kernisan adds that we need to know about aging and financial decline.
5 Things To Know About Aging & Financial Decline
- Declines in financial ability can easily be exploited by family, friends, and strangers.
This point is especially vividly brought to life in the Times story, which starts off by relaying the true story of a man who got remarried late in life to a younger woman. This new wife proceeded to financially deplete her husband’s finances, despite the man’s family attempting to intervene. In other words, declines in financial ability make older adults very vulnerable to financial abuse, which can be perpetuated by family members and friends, as well as by scammers and strangers.
- Even people who don’t have Alzheimer’s or a neurodegenerative disease often experience increasing difficulties managing their finances as they age.
This is consistent with our improved understanding of “cognitive aging,” which the Institute of Medicine recently covered in a groundbreaking new report. Basically, even in the absence of disease the brain’s abilities change as people age. This process proceeds a little differently for every person, but it’s analogous to the aging that we see in other parts of the body: things change with age and wear. Not all changes are negative, but the changes can eventually make managing finances harder.
The Times notes that research suggests the ability to manage finances peaks when people are in their mid-50s.
- The ability to handle financial matters is often one of the first skills to decline in Alzheimer’s and other common causes of dementia.
The article cites this in a 2009 study, which found that declining financial abilities were linked to progressing from mild cognitive impairment to actual dementia.
The article doesn’t otherwise provide much information or advice regarding financial problems and Alzheimer’s, but I can confirm this in my own experience. The ability to manage finances is almost always affected in people with early dementia, because this is a skill that requires a lot of mental coordination plus correct assessment of financial risks. (And people with dementia usually get worse at assessing risks.)
- If you notice signs of financial impairment, you should start looking for other signs concerning Alzheimer’s or another dementia.
This was not really part of the NYT article, but it’s important and I see families often miss this. Now, it’s certainly possible to develop some difficulties with finances and not have it be Alzheimer’s. It could be mild cognitive impairment, it could be depression, it could be another medical problem, or it could even be cognitive aging.
That said, it’s obviously quite common for seniors to develop Alzheimer’s or another dementia, especially if they are older or if it runs in the family. And we know that Alzheimer’s is often diagnosed much later than it should be, in part because families aren’t sure what to do and primary care doctors usually aren’t good at picking up on signs of early dementia.
- Be sure to work on optimizing brain function, if you are concerned about financial impairment.
This is another key point that is not mentioned in the NYT article but that you really should know. You can pursue this whether or not someone has a dementia diagnosis, or is getting evaluated for possible Alzheimer’s.
The main way to optimize a person’s brain function is to identify and reduce medications that interfere with thinking skills. You should also help the older person get assessed for medical problems that interfere with thinking, such as depression, thyroid problems, vitamin B12 deficiency, and so forth.
In my experience, it’s fairly common for older adults to be using sedatives such as benzodiazepines or zolpidem. (Here’s a post on how you can help a senior stop a benzodiazepine such as Ativan.) High doses of anticholinergic medications can also interfere with thinking. For more tips on identifying problem medications, see here.
Other things that help optimize brain function include getting enough sleep, regular exercise, and avoiding excess stress.
How to Protect a Senior From Future Financial Decline
An ounce of prevention is worth a pound of cure, as the saying goes.
Since I’m a doctor, I’m most familiar with health approaches that can delay or prevent future financial decline. Briefly, those are to avoid risky medications and otherwise reduce the risk of Alzheimer’s and cognitive impairment.
But since financial decline is so common, it’s a good idea for seniors and families to pursue some financial prevention tactics as well. Here are some useful practical strategies that I learned about in the NYT article:
- Encourage seniors to simplify their financial lives. This should ideally be done around retirement age (e.g. when one is in one’s 60s), before the ability to manage finances declines. Seniors may be more willing to do this if we collectively get better at educating people about how common age-related financial problems really are.
- Address financial planning early on through legal tools such as financial power of attorney and living trusts.
- Preauthorize lawyers and financial planners to contact a trusted relative or friend if the professional suspects diminished financial abilities. This can make it easier for professionals to get a senior’s care circle involved sooner rather than waiting for a frank financial disaster to happen.
- Encourage seniors to allow a trusted person to monitor their accounts. This could be family, or could be done by a professional such as a fiduciary. Again, I would imagine this is best discussed and arranged early. (In my experience, seniors often become defensive and even a bit paranoid once they start slipping cognitively, so that is usually a hard time to suggest monitoring financial accounts.)
Please do not put this off! Call us today to schedule a conversation.
Barbara A. Culver
CFP®, ChFC®, CLU, AEP®