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Identifying Financial Decline in Seniors

Age-related decline is often thought about in terms of physical decline or cognitive decline, but rarely considered is the decline in one’s ability to manage their finances. Last year, a study published in the Journal of the American Geriatrics Society shed light on just how big of a problem financial decline is for seniors. Over the course of a decade-long study, 30 percent of participants were observed to have difficulty managing their finances. As a point of reference, only 15 percent were observed to have difficulty managing their medications. Because financial decline is so rarely discussed, most seniors are ill-equipped to handle this change in their ability and are unaware of resources to help them with their daily money management.

What is contributing to declining daily money management abilities for older adults?

While we continue to live longer thanks to healthier lifestyles and advanced medical care, research has shown that the human brain peaks in the early 20s. Adults even as early as their 40s begin to notice subtle changes in their cognitive ability with mild forgetfulness and the inability to recall new names.

Experts predict that the 2020 census will show that the United States has an estimated 66 million people who are 65 and older. The Center for Disease Control’s (CDC) research showed that an estimated 5 million Americans, as of 2013, aged 65 years or older had Alzheimer’s disease. The CDC predicted that this number may triple to as many as 13.8 million people by 2050. These numbers do not include aging adults who suffer from another type of dementia, memory loss, or impairments due to a cause like a vitamin deficiency or a medication side effect. As adult age, the possibility for memory loss increases. Researchers have found that half of adults in their 80s either have dementia or at least some cognitive impairment that is not linked to dementia.

An early indication for the decline in cognitive abilities can become apparent through the inability to complete simple math problems. Where balancing a checkbook or tipping a restaurant server was once an easy task to perform, memory loss makes the management of finances difficult.

What are some ways to identify that an aging adult is having difficulty managing their finances?

The problem may present itself through the hesitation or inability to make change when a cash transaction occurs. As debit and credit cards continue to increase in use for daily purchases, seniors with memory loss may be able to mask problems, better than in years past.  One way to help identify such a concern is to give a senior a small amount of cash and encourage them to purchase snacks at the movie. Do they pause when accepting the change, fumble as they count it back, or do they accept the change without counting, unlike their previous behavior? Event this minor transaction could lead to a larger discussion about aging and memory loss.

Similar to any difficult task, the tendency to postpone paying bills can be a marker that an aging adult is struggling with their finances. If a senior has a pile of unpaid bills in their mail or the utility companies are calling about delinquent payments, then it could be time to discuss the management of their finances. Additional ways to detect potential financial problems is by identifying excessive or unnecessary purchases or noticing that a senior displays anxiety over known scams such as the “IRS” calling to threaten jail time if a large payment is not submitted immediately.

How can problems with aging, personal finance, and memory loss be solved?

Building a trusting relationship with a senior where finances are reviewed on a regular basis allows for issues to be detected at an earlier stage. A financial evaluation should extend to the review of any signed documents to prevent possible identity theft or fraud. Assuming responsibility for being a check and balance on financial transaction offers input over expenses without removing the senior’s independence. IKOR offers manageable solutions like a Personal Needs Coordinator who can sit with a senior and assist with their finances.

For information about memory loss how it affects personal finances, please visit Recognizing and Preventing Financial Exploitation Targeting SeniorsHelping Seniors Avoid Identity Theft, and Combating Tax Scams and Tax Identity Theft.