6 Early Warning Signs You’re Cognitively Declining

How To Protect Your Financial Plan While You Can Still Manage Your Own Finances

Aging is an inevitable part of life but losing control of one’s finances a result doesn’t have to be. There are some signs that we can look for to determine if our thinking and awareness are impaired — and steps we can take to ensure our financial well-being is protected.

In the United States, we are an aging society. Currently, there are approximately 45 million individuals aged 65 and older, which represents 14 percent of the total population. In just a decade, this number is expected to expand to approximately 66 million. Collectively, this group holds trillions of dollars in wealth. Cognitive changes associated with aging are putting this population at risk; as aging adults continue to manage their finances, they may be more vulnerable to financial exploitation and scams.

Recent research indicates that nearly half of all adults in their 80s have some form of thinking/awareness impairment. Science has shown that as cognition becomes impaired, the ability to handle math and money matters can be the first place problems arise. Indeed, even aging individuals who show no symptoms of cognitive decline can find normal management of their finances more difficult as time goes on.

Related: 8 Reasons Why Retirement Is The WORST

The National Endowment for Financial Education compiled a checklist of early warning signs that may suggest when an aging individual’s ability to manage their finances is declining. These include:

  • Taking more time than usual to complete daily financial tasks.
  • Difficulty in paying bills by mail, managing their check register.
  • Difficulty with tax filings.
  • Lack of attention to detail, such as failure to review bank statements or pay bills on time.
  • Loss of understanding of basic money terms like “minimum balance.”
  • Lack of skepticism of scam offers and foolish investments.

While these failings make older people vulnerable, it’s not always easy to let people help you. It can be hard to admit that you may need someone else to manage your financial matters. It’s best to find someone you trust who is gentle, understanding — but insistent — in their efforts to protect your interests.

There are safeguards that can be built into an individual’s financial plan to help prevent financial vulnerability. Tools that can be used to protect finances include revocable living trusts and financial powers of attorney. Many banking institutions have their own forms for financial powers of attorney, so it’s important to go to all of your banking institutions and let them know you would like to designate an agent under a financial power of attorney.

Related: 5 Reasons Why You Should Have A Financial Advisor

The agent should be someone that you trust implicitly, as they will have the power to “step into your shoes” and manage your finances. An important aspect of the financial power of attorney is that it does not have to go into effect right away; you can designate a time that the instrument should become effective. You may also revoke the power at any time.

Other strategies to protect an aging individual’s finances are to put a freeze on credit files so criminals cannot open fraudulent lines of credit in the senior’s name. Automating bill payments where appropriate is also suggested to streamline paying bills correctly and on time. Providing a trusted family member or friend with access to online bank account information to monitor the accounts is also recommended, as this is an additional protection and monitor for fraud or unusual activity.

While these steps can help ameliorate the effects of cognitive decline and increased difficulty in managing your finances, they are not foolproof. Too often the source of financial abuse and exploitation is a family member, so it’s important to have more than one person involved in helping to manage or monitor your financial affairs.

But with a loving committed team and a system in place, you and your money are in a much better place.

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