• Safeguarding Your Finances from Cognitive Decline

  • by Austin Quinn
Safeguarding Your Finances from Cognitive Decline

Change is natural as people age. And as people age, some begin to feel a bit more forgetful or disoriented in their day-to-day lives. While these problems are not always indicative of more worrisome conditions such as Alzheimer’s, even mild cognitive impairments can cause memory loss and poor judgment – which may not be obvious until it’s too late. It’s best to talk to a financial advisor, but we also have a few tips. To learn more about how you can protect your assets from cognitive decline, read on.

Stay Alert for Signs of Change

Even for those without Alzheimer’s or dementia, mild cognitive impairment can still occur. In order to protect yourself from the effects that these changes may have on your finances, keep an eye out for the following problematic signs in yourself or a loved one. If you see any of these issues, we recommend contacting a medical professional for proper diagnosis and treatment:

  • Forgetting to pay important bills such as rent, a mortgage, or a utility service
  • Concern over “missing funds” that seemed to disappear with no recollection
  • Unusual withdrawals and purchasing behavior
  • Difficulty balancing checkbooks, calculating change, or organizing financial documents
  • Falling prey to scams and fraud
  • Large numbers of phone solicitations
  • Calls from the bank about account problems

Protect Yourself from Scams

Due to higher risks for cognitive impairment, seniors are often the targets of financial abuse and fraud. In fact, according to the Metlife Study of Elder Financial Abuse, seniors lose approximately $2.9 billion per year to scammers. Worse yet, many elderly Americans are less likely to report themselves as victims of fraud – in some cases, they may not even realize it yet. To reduce the likelihood that you or a family member will suffer from financial abuse, make sure to do plenty of research on common scams.

Take Action

For many of life’s challenges, preparation is essential – and finances are certainly no exception. To keep your finances in stable condition, consider the following goals:

  • Reach out to friends and family – When times are tough, friends and family are there for each other. Decide who is trustworthy enough to help you fulfill routine financial responsibilities such as managing bank accounts, making investment decisions, preparing taxes, and paying bills.
  • Identify expected costs – Consider the costs you may need to pay further down the road. Hospital bills, rising costs of living, and emergency expenditures can all drain your savings, so it’s a good idea to prepare for these kinds of events as best as you can.
  • Check credit reports – When you’re having trouble keeping track of your accounts, consider a credit monitoring service that will remind you (and your trusted loved ones) of your current credit status. Of course, you’ll always have access to a free annual credit check, but additional reports may be helpful for certain situations.
  • Use the “do not call” registry – Add yourself to the “do not call” registry and consider investing in caller ID so you’ll know who is calling you and when it would be better not to pick up the phone.
  • Investigate government benefits – You may be eligible for multiple government benefits that you aren’t currently aware of. Search the web and look for as many options as possible. If you’ve served in the armed forces, you may also be able to access various veteran’s benefits.
  • Look for help with taxes – When reaching out to a loved one for help, it’s important to remember that your family members probably won’t be able to take over all of these responsibilities at once.

Plan Ahead

Discussing memory loss with a loved one may not be easy, but it’s better to plan for the worst rather than put it off until it becomes a problem. Before these issues come to the forefront, consider reaching out to a trusted family member or friend who can act as an agent and help manage future financial decisions.

If you’re in a complex financial situation or you aren’t comfortable with doing financial planning by yourself, think about discussing your concerns with a licensed financial advisor or estate planning attorney. These professionals will be able to assist you with outlining a long-term plan that will help your resources endure. Make sure to ask the financial advisor if they have experience with elder care and long-term care planning. Lastly, check the advisor’s qualifications, credentials, and areas of specialty in order to find the right fit for you.