While we would all love to age gracefully and healthily, there’s the reality that our mind and bodies can fail us. Cognitive decline, also referred to as cognitive impairment, is a condition in which an individual is suffering from memory loss or challenges related to language, judgment, and thinking, according to the National Institute on Aging. Conditions can range from subjective and mild cognitive decline to more serious diseases like dementia and Alzheimer’s.
Bruce Willis, beloved Hollywood actor, recently shared his aphasia diagnosis, which is a form of frontotemporal dementia. According to Mayo Clinic, this type of dementia can affect behavioral changes including, lack of judgement, loss of empathy, speech and language problems – ranging from difficulty in using and understanding written and spoken language, and motor disorders. With his condition, his family, advisors, and support system must be sensitive to his decision-making capabilities and account for any changes that his diagnosis will impact.
On the other end of the spectrum, there is subjective cognitive decline (SCD). SCD is the self-reported experience of worsening or more frequent confusion or memory loss within the past year, as defined by the Centers for Disease Control and Prevention (CDC). The organization also reports that:
- 1 in 9 people aged 45 years and older are experiencing SCD
- Over a third of people with SCD reported it interfered with social activities, work, or volunteering
- 11.9% of men report suffering from SCD compared to 10.6% of women
All of that to say, if you’re experiencing these symptoms, you’re not alone. Cognitive decline is scary and unsettling. It’s important to be honest and open about your symptoms as it will help you surround yourself with a strong support system as you navigate these changes. As wealth managers, it's our priority to ensure our clients are taking care of themselves and we recognize the impact that cognitive decline can have on their finances.
Protecting your finances
Those with any degree of cognitive decline should approach their finances with an abundance of caution. First and foremost, families with elderly parents should have open conversations around finances, mental capacities, and contingent plans if cognitive decline progresses.
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Not only will everyone be on the same page, but you’ll be able to decide on advocate(s) who will step in on your behalf. Proactively identifying who will step in as your advocate to help make decisions will relieve everyone of difficult conversations during an already overwhelming period. This individual will not only be up to speed on your financial needs, but your wishes as well to ensure they’re carried out as you intend.
In terms of day-to-day protection, those with cognitive decline are at risk of harming their personal finances whether it be forgetting to pay bills, getting scammed, or general mismanagement. Those in retirement are on a fixed income, so deviations like missing a payment or falling for a scam can lead to a snowball of consequences, ultimately jeopardizing financial wellness. Any degree of cognitive impairment puts an already vulnerable individual at greater risk of being a target of a scam. Did you know that in 2021, there were more than 90,000 older victims of fraud resulting in $1.7 billion in losses, according to the Federal Bureau of Investigation?
Having an advocate actively involved and helping to manage money will add a layer of protection against any potential financial mishaps. Be sure to introduce them to your financial advisor, attorney, and others to put the appropriate documents (Power of attorney, healthcare directive, etc.) in place to allow the advocate to be able to make decisions.
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Signs of cognitive decline
There are a number of symptoms that may suggest you’re suffering from a more serious degree cognitive decline than what’s expected. The Mayo Clinic highlights the following symptoms are due to mild cognitive impairment:
- You forget things more often
- You miss appointments or social events
- You lose your train of thought, or you can’t follow the plot of a book or movie
- You have trouble following a conversation
- You find it hard to make decisions, finish a task or follow instructions
- You start to have trouble finding your way around places you know well
- You begin to have poor judgment
- Your family and friends notice any of these changes
If you find yourself suffering from these symptoms as well as depression, anxiety, a short temper and aggression, or overall, a lack of interest, then consider talking to your family and scheduling a screening appointment with your doctor to begin tracking any changes.
Administration on Aging: www.aoa.gov
Alzheimer’s Association: www.alz.org
Centers for Disease Control and Prevention’s Healthy Aging Program: www.cdc.gov/aging
Council of State Governments: www.csg.org
Family Caregiver Alliance: www.caregiver.org
National Alliance for Caregiving: www.caregiving.org
National Association of Area Agencies on Aging: www.n4a.org
National Institute on Aging: www.nia.nih.gov
Please consult with an attorney or a tax or financial advisor regarding your specific legal, tax, estate planning, or financial situation. The information in this article is not intended as legal or tax advice.