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While many older Americans end up cash-strapped due to a lack of savings, some wind up in that boat due to poor investments made while suffering from early-stage cognitive decline.
A 2024 AARP survey found that 61% of Americans 50 and over are worried they won’t have enough money to support themselves in retirement.
The Wall Street Journal also highlighted the problem of memory loss in a November article. It pointed to sobering data collected between 1998 and 2014 by the University of Michigan Health and Retirement Study. The data found that among older Americans with memory loss, only 20% rated their memory as being worse than it was two years prior. The participants in the survey were from varying household incomes, as they averaged about $379,000 in net worth, with a median of about $190,000.
Here’s what’s scary, though. Participants who experienced a severe memory-loss event over the last two years — and were unaware of it — saw an average $31,000 decline in their net worth. Those who experienced severe memory loss and knew about it saw their wealth decline by just $5,400.
In some cases, monetary losses and other adverse events can be a sign of cognitive decline. A 2020 study from Johns Hopkins University found that people with dementia started to exhibit financial symptoms up to six years before an actual diagnosis.
If you have a loved one you suspect is suffering from cognitive decline, it’s important to help them manage the situation. Here’s what to do.
As of 2023, nearly 10% of people over age 65 had a diagnosis of dementia, according to the Kaiser Family Foundation. The first step in helping a loved one with cognitive decline is to seek medical assistance and to get an accurate diagnosis. From there, a medical team can strategize a treatment plan to manage your loved one’s condition.
Genworth reported that the average cost of a home health aide, which may be necessary for someone with dementia, is $6,292 per month. If a loved one suffering from cognitive decline needs hands-on care, it comes at a steep cost, so it’s important to do what you can to protect their assets.
A durable power of attorney is a legal arrangement that allows you to make financial decisions on a loved one’s behalf. With the help of a lawyer, you can solidify an agreement that grants access to your loved one’s financial accounts and make sound decisions with their assets.