Once we hit age 71, our risk for Alzheimer’s disease and other dementias goes up. Research shows that nearly 14% of those aged 71 and up have dementia and nearly 10% have been diagnosed with Alzheimer’s disease. The risk of both dementia and Alzheimer’s disease only increases with age.
Financial woes, of course, don’t begin to happen immediately upon diagnosis. But symptoms can worsen over time. According to the Center for Retirement Research, about 80% of older adults with dementia are unable to manage their finances.
The warning signs of potential money problems, according to the National Institute of Aging, are unpaid or unopened bills. Other signs are an unusual number of new credit card purchases, strange new merchandise in the home, and money missing from a person’s account. Small decisions can quickly snowball into big money problems that threaten a person’s life savings and quality of life.
That means millions of Americans are on guard, caring for loved ones who can no longer make smart decisions about their money. As their friend or family member’s memory fades, they’re paying bills and keeping tabs on Social Security payments, insurance policies, and other matters. Here are tips for managing the finances of a loved one with dementia or Alzheimer’s disease.
Get power of attorney
Power of attorney is a legal document that gives someone, typically a family member or trusted friend, the ability to make decisions about finances and other matters. The person with power of attorney takes over when the person living with dementia no longer has the legal capacity to make good decisions. The Alzheimer’s Association recommends it among the legal documents that loved ones get after diagnosis.
Protect and prevent
Before and after you take control of their finances, it’s important to be aware of common scams that target older adults. The National Council on Aging recently listed the most popular ones. This includes scams that involve a con artist posing as a government official, grandchild, or computer tech expert. Others involve sweepstakes scams, romance scams, and pretend charities.
To protect and prevent older adults from falling prey, the Handbook for Helping People Living Alone with Dementia, recommends keeping a watchful eye. Get them off telemarketers lists via the Federal Trade Commission’s Do Not Call Registry. Check their credit reports each year. Enroll in automatic bill payment. This will ensure nothing gets left unpaid. Let local bank tellers and shop owners know that the individual may have trouble with even simple transactions. Some banks and utility companies, according to the report, will notify a third party about unpaid bills or large withdrawals. These are both red flags that something is amiss.
Offer some independence
Even if you’ve started making financial decisions for your loved ones, it can still help to give them a bit of independence. The National Institute on Aging notes that older adults can feel suspicious when they no longer have access to their checkbook or bank account. The institute recommends giving an older adult a small amount of cash or lowering the spending limit on a credit card. This will help them have some connection to their money. With it, they can still run errands at the grocery store or pay for lunch out with friends.
A diagnosis of dementia and Alzheimer’s disease can be devastating. But when an individual with dementia falls prey to a scam or fritters away their life savings, it only makes a tough situation worse. Taking steps to avoid financial disasters can help to protect them in their final years.
Consumer Education Services, Inc. (CESI) is a non-profit committed to empowering and inspiring consumers nationwide to make wise financial decisions and live debt-free. Speak with a certified counselor for a free debt analysis today.
