Alzheimer’s, Dementia and Money Problems

Alzheimers Dementia Finances

National Institutes of Health (NIH) reports that over 5 million people in the U.S. suffer from varying degrees of dementia. While the emotional impact of Alzheimer’s or dementia is troubling, the financial impact can be devastating on baby boomers and their family members in situations where caregivers and family members don’t step in early enough to prevent problems from brewing.

While not all family members have the time to take on an active role, they can connect loved ones with financial resources designed to stabilize financial health. Bill paying services like SilverBills can save the day by assuming the all-important financial responsibility of paying bills in a timely fashion while protecting seniors against financial fraud that targets boomers.

Alzheimer’s and Dementia’s Unmistakable Impact on a Family’s Financial Stability

Inarguably, end-of-life expenses related to the care of family members with dementia or Alzheimer’s presents an enormous burden for a significant number of U.S. citizens. Alzheimer’s Net estimates the lifetime costs associated with caring for someone with Alzheimer’s to be about $341,840, conservatively. Considering the fact that 41% of caregivers hail from a modest financial background earning about $50,000 a year in household income, it is easy to understand the enormous burden and financial toll experienced when it is time to start paying for care.

Granted, Alzheimer’s Net reports that family members and unpaid caregivers stepped in to help out to the tune of $232 billion in 2017. That equates to 18.4 billion hours.

Problems often arise before family members and friends are aware there is cognitive decline present. Since dementia can show up slowly over a long period of time, the subtle signs are too often missed. It is common for missed payments and other signs of cognitive impairment related to financial mishaps long before family members and friends are aware of the situation. Embarrassed seniors who want to remain independent are often reluctant to reach out for help even when they know they need it.

Part of the tragedy of a disease that relates to cognitive deficiencies is that a senior can lose their home or go into debt due to piling up late charges or missed payments, ruining their finances at the very time in life when they so desperately need financial stability to survive. That’s why it is so important to stay involved with senior family members to be sure they are not beginning to get into financial trouble. A financial disaster can spiral out of control quickly.

Research Verifies a Significant Link Between Cognitive Decline and Financial Instability

New research published on the JAMA Internal Medicine site found that people can begin to have trouble managing their bills and financial life years before they are officially diagnosed with Alzheimer’s. That’s why it is important to be aware of the signs of dementia so it can be caught early on.

Scientists from Johns Hopkins University led a study that reviewed Medicare claims, credit reports and credit card payments to examine correlations between poor payment history, diminished credit scores and mental decline. The study was conducted on 81,000 Medicare recipients spanning the years from 1999 through 2018. This research’s purpose was to evaluate how people managed their money in the years prior to and following a dementia diagnosis.

The study was limited to single Medicare recipients who lived alone to control the research subjects environment and limit outside influences. Data were collected to determine the number of missed credit card payments and reported credit scores to cover the seven years prior to a diagnosis of dementia. The same information was gathered and reviewed for comparison purposes for the four years following the diagnosis.

Findings suggest that people ultimately diagnosed with dementia had a history of missed payments dating back to as long as six years before their diagnosis in many cases. These people were also more likely to have lower credit scores than average, dating back two and a half years before their diagnosis.

Not surprisingly, after a dementia diagnosis, study participants missed more payments and had lower credit scores when compared to their counterparts without dementia.

Another interesting finding worth discussing related to the differences between subjects with different educational backgrounds. People diagnosed with dementia who had attained higher levels of education also missed payments, but those financial mistakes were usually limited to the 30-month period prior to diagnosis. This finding indicates that people with higher educational levels experience less severe symptoms.

One of the most important insights of this study relates to the timeframe when seniors are at risk of suffering from the repercussions of financial mismanagement. Since research indicates a six-year to two-year period of time prior to a dementia diagnosis when boomers begin to struggle with financial responsibilities, it is critical for seniors and their family members to use early diagnostic tools to ensure they can protect their family members and friends before financial trouble begins.

Signs of Money Problems to Come

Getting a jump on financial problems on the horizon before they become serious is key for minimizing the stress associated with mistakes that can cost a family a small fortune, ruining the financial health of a person struggling with cognitive impairment.

Below are the signs that there are money problems.

  • Difficulty counting out change
  • Problems balancing a checkbook
  • Inability to figure out the tip
  • Unopened bills from days or weeks earlier
  • Increasing credit card debt for frivolous purchases
  • Money unaccounted for that is missing from a bank account
  • Confusion surrounding a budget

How to Approach a Sensitive Conversation about Money Issues with an Older Family Member

Every family is different, but many believe that it is rude or unseemly to discuss finances. That’s why it is important to plan this type of discussion before broaching the subject of financial intervention of any kind. While it is necessary to have this type of talk early for the reasons mentioned above, this type of sensitive discussion must be carefully orchestrated to avoid offending family members or friends in need of help.

Below are some guidelines for discussing finances with seniors.

1. Consider approaching a discussion about finances via a news story you saw recently.

It is important to be nonthreatening and low-key when approaching emotionally charged subjects. Baby boomers often have more time to watch the news as their lives slow down. Using a relatable jumping-off point that has been aired recently in the news makes it easier to begin a discussion about future financial planning options while offering your help to make their lives easier.

2. Ask your parents for planning advice.

Seniors are accustomed to advising younger family members. Treating them with the respect they deserve is a good place to start when inquiring about their finances. Let them know you value their opinion as you make your own financial plans. Open up a conversation about how they safeguard and store important financial and legal documents.

3. When discussing the name of a trusted financial adviser or referral, mention your willingness to be a financial power of attorney, executor or health care proxy when they want you.

Once you are already discussing financial matters, it is easier to offer your services without coming across as greedy or self-serving. For example, you might tell them about a friend of yours who is helping their parents out and say that you want to help make their lives easier too.

4. Stay away from overly sensitive topics related to final wills and inheritance figures.

It is important to realize that many seniors will need most of their money for end-of-life expenses and that the last thing that needs to be discussed is how much will be left to family members. Let your senior family members know that you want to make their life easier and lend a helping hand as needed to ensure they have what they need when they need it.

5. Relate a story about friends who are using a resource like a bill paying service or estate planner to help out.

Much like using a maid or any other service, using professionals to help with financial housekeeping can be viewed as a wonderful luxury instead of a necessary evil that points out the need for help related to cognitive decline.

Financial Tips for Caregivers and Seniors Facing Cognitive Challenges

A key recommendation that caregivers should consider is to take steps early to protect loved ones if they are showing signs of dementia. Some of the best preventative measures you can take are listed below.

1. Hire a bill payment service like SilverBills to ensure payments are made on time for the correct amount due.

2. Give seniors small amounts of cash to use as they see fit, so they feel independent but are also protected.

3. Lower credit limits on credit cards to avoid overspending.

4. Limit the amount of accessible credit by getting rid of extra credit cards that aren’t necessary.

5. Discuss a meeting with an attorney to consider legal arrangements to transfer financial authority before dementia gets serious.

Takeaway

One of the first signs of declining cognitive function is poor money management. People with high credit ratings and meticulous payment histories will start missing payments long before an official dementia diagnosis is made. That’s why it is important to recognize the signs of financial mismanagement so that serious problems can be avoided to protect your family’s financial future.

Many proactive strategies can be utilized to lessen the burden of everyday financial stressors. Bill paying services like SilverBills offer money management services to ensure financial protection from missed payments and fraud.

It is always a good idea to begin discussing financial matters with baby boomers and older seniors early on before any signs of dementia occur as a smart way to avoid the worst types of financial disaster.

Alice Goldstein
A Licensed Professional Counselor and Life Coach for over 25 years, Alice has written on a wide range of topics, touching on issues that matter most to seniors. Check out her article “Tips for Successful Marriages for Couples over 70” - a popular post on Marriage.com where Alice is an “Expert” author. Learn more about Alice Goldstein