Among the estimated 50 million adults 65 and older in the nation, 20% have a form of cognitive impairment. And many of those individuals live alone and are having difficulty managing their finances, leaving them susceptible to mismanagement, according to a new study.
Research led by the University of Washington, Seattle, included 8,786 adults aged 65 and older to determine the extent to which older adults with and without cognitive impairment manage their money, including risky assets such as stocks and loans.
According to their results, published in JAMA Network Open, three-fourths of participants in each group said they were managing their own finances. In addition, 56.6% of participants with dementia and 15.3% with cognitively impaired non-dementia, or CIND, reported having difficulty managing their finances, compared with 3.8% of participants without cognitive impairment.
Of those who said they had difficulties, 43.1% lived alone. And a substantial portion of participants with CIND (37.7%) or dementia (32.2%) who managed their own finances also owned risky assets.
The result, according to the study, is the potential for negative financial consequences, including missed bill payments, risky investment choices and financial exploitation.
The researchers concluded that early financial planning, even among cognitively healthy individuals; involvement of extended family or others; movement to simpler financial products; and availability of financial counseling for householders with cognitively impaired members may be useful in management of financial assets.
The study used proxy reports from family members and caregivers on participants’ functional status, along with cognitive test scores, to categorize participants as having no cognitive impairment, CIND or dementia.
In a commentary on the study, Jason Karlawish, MD, from the University of Pennsylvania, said that what is novel about the study is that it also included the perspectives of the people living with cognitive impairment.
Karlawish called difficulty managing finances one of the “most serious harms” for older adults with cognitive impairment. He noted that such people experience problems performing instrumental activities of daily living that allow them to make decisions about how they live their lives.
“Financial management is cognitively demanding,” Karlawish wrote. “Not only clinicians, but the institutions that hold and manage those adults’ financial assets, should heed the results by beginning with asking the simple question, ‘Are you having any difficulty managing your finances?’”
