More than 7 million seniors in the United States struggle with mental declines, from dementia and other memory impairments to a diminished capacity to think clearly and make decisions. And yet many of these seniors still manage their finances, often alone, placing their financial well-being in jeopardy.
Managing household finances can be tricky for anyone in today’s economic times, yet a surprising number of seniors with cognitive impairment — 75% or more in a recent study from the University of Washington in Seattle are still tackling the challenge.
A lot is at stake. Roughly one-third of study participants with dementia or some level of reduced thinking capacity otherwise known as “cognitively impaired nondementia” (CIND) reported managing “risky assets” such as stock portfolios. Seniors with dementia had stock portfolios with a median value of $215,000, and about $125,000 among those with CIND, the study found.
Financial security is especially important to older Americans living with cognitive impairment because they may face a future with years of long-term care and support.
Proactive planning
Researchers concluded proactive planning is a must, from early screening for cognitive impairment to early financial planning, such as designating a financial representative or surrogate decision-maker in the event of a senior’s loss of cognitive capacity. For those with dementia, possible money management interventions include involving extended families, financial counseling and switching to simpler financial products.
Jason Karlawish, professor of medicine at the University of Pennsylvania Health System’s Penn Memory Center in Philadelphia, said it’s important for those who work with seniors to ask them a simple question: “Are you having difficulty managing your finances?”
