Financial Signs of Alzheimer’s Disease and Dementia

Numerous studies have found that Alzheimer’s disease can often be diagnosed in the wallet before in a doctor’s office. That’s because trouble handling financial tasks tends to surface in those with Alzheimer’s and related dementias before they start showing obvious signs of memory loss. 

That doesn’t mean if you’re an older adult that you should panic if you forget to pay one bill. However, you should be aware of the financial signs of Alzheimer’s disease so that you can distinguish mistakes you or a loved one is making from typical age-related changes.

What to know about Alzheimer’s and dementia

Dementia is a term used to describe a variety of symptoms that are the result of changes in parts of the brain responsible for memory, language and thinking. Alzheimer’s disease is the most common cause of dementia and currently affects more than 6 million Americans.

According to the Alzheimer’s Association, there are five stages of Alzheimer’s disease.

• Preclinical: During this stage, individuals start experiencing changes to the brain but don’t exhibit any symptoms.
• Mild cognitive impairment: Subtle symptoms of memory loss begin to appear during this stage and usually are noticeable only to the individual and close family and friends.
• Mild Alzheimer’s: Individuals still can function independently but likely need help with certain activities such as handling money and paying bills.
• Moderate Alzheimer’s: Problems with memory and language become more pronounced. Multi-step tasks such as bathing and dressing are harder to complete. Individuals might experience personality and behavioral changes and might have trouble recognizing loved ones.
• Severe Alzheimer’s: Individuals struggle to communicate, can become bed-bound and require round-the-clock care.

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The risk of developing Alzheimer’s disease increases greatly with age. According to the Alzheimer’s Association, 5% of people age 65 to 74, 13% of people age 75 to 84 and 33% of people age 85 or older have Alzheimer’s disease. Currently, there are no cures for the disease. The average lifespan after a diagnosis is four to eight years—but can be as long as 20 years.

Financial difficulties related to Alzheimer’s disease

The symptom most often associated with Alzheimer’s disease is memory loss. However, numerous studies have found that a decline in financial skills and financial judgment can begin well before there are obvious signs of memory loss or a diagnosis of Alzheimer’s disease. These are skills that can be impacted that shouldn’t be dismissed as normal signs of aging.

Trouble staying on top of bills and daily finances

Occasional errors when managing household bills can be a normal part of aging. However, if you find yourself or your loved one making more and more mistakes, it’s cause for concern. According to research published in the Journal of the American Medical Association, those with Alzheimer’s disease and related dementias were more likely to miss bill payments up to six years before a diagnosis compared with healthy adults. And researchers at the University of Alabama found that those with mild cognitive impairment had trouble managing checkbooks and bank statements, in addition to staying on top of bills.  

Increased susceptibility to scams

Not only do financial skills decline as Alzheimer’s disease progresses, but so does financial-decision making ability. Impaired judgment can put those with the disease at increased risk of financial exploitation because it’s harder for them to spot scams, says Dr. Nathan Spreng, professor of neurology and neurosurgery at McGill University. If you or a loved one are increasingly falling prey to scams, it could be the result of dementia.

Donating too much 

If you donate to charities and other causes, it’s easy to forget when you donated and how much you gave when you have memory loss. Plus, when financial-decision-making ability declines, it becomes harder to know when to stop giving, according to an article written by Dr. Andrew Budson in the Harvard Health Blog.

Making poor investment decisions

Those with memory loss are more likely to make bad investment decisions because they don’t recognize the risks and understand the implications of their transactions. As a result, they can end up losing large amounts of money and ruining their finances.

[ Read: Why You Should Talk to Your Adult Children About Your Finances ]

How to protect your finances if you have Alzheimer’s

If you or someone you love is starting to have trouble managing money matters or is increasingly forgetting things, take these steps as soon as possible to put financial protections in place.

Appoint a financial power of attorney. All adults should name a power of attorney to make financial decisions and transactions for them if they can’t. If you haven’t done so already, meet with an elder law or estate planning attorney to draft this legal document for you so you can name someone you trust to manage your financial affairs for you. You don’t want to wait for your memory loss to progress before you do this because you must be mentally competent to sign a POA document. If you’re no longer competent, a judge can appoint a conservator to manage your finances for you—and it might not be the person you would have chosen.

Identify trusted family members who can help you with your finances. Share details about your finances with these trusted family members so they can manage your finances in a way you would want if you become unable to yourself. This allows you to build a circle of support before memory loss progresses. Otherwise, people you don’t trust might try to fill those support roles and take advantage of you.

Get a second set of eyes on your finances. Even adults with mild cognitive impairment should have ongoing oversight of their finances by family members, according to authors of the study “Declining Financial Capacity in Mild Cognitive Impairment: A Six-Year Longitudinal Study.” Consider using a digital service such as Carefull, which provides 24/7 financial, credit and identity monitoring and allows you to give trusted family members view-only access to your accounts. They will receive alerts if Carefull spots anything unusual so they can help you resolve any issues.

Don’t answer the phone. To avoid being tricked by scammers, let all calls go to voicemail. Then, you can listen to the message and decide if you want to respond—or ask a family member if you should respond. Also, don’t respond to or click on links in text messages and emails. If the messages appear to come from a business or organization you know, reach out directly to the organization to see if it was trying to contact you.

Create a donation list and giving budget: To avoid giving away too much money, make a list of the organizations and causes you care about and an amount you can afford to give to each. Hang up that list by the phone or keep it with your checkbook so you can make notes of when and how much you give to those organizations.

Get help with financial decisions: Before making any investments or financial decisions, talk with a trusted family member or a financial advisor. In fact, if you’re not already working with a financial advisor, consider hiring a fee-only (not commission-based) fiduciary who is required to work in your best interest, such as a CFP® professional, to help you create a financial plan to accommodate your care needs as your dementia progresses. 

Name trusted contacts: Provide your financial advisor, accountant and your financial institutions with the name of a trusted contact they can reach out to if they suspect that you are a victim of financial exploitation or that you’re having trouble managing your finances as a result of cognitive decline.

Many of these steps might feel like you’re giving up your financial independence. However, you shouldn’t think of it this way. Planning ahead and getting trusted family members and professionals involved with your finances as soon as possible will help ensure your financial well-being. 

[ Keep Reading: Emergency Planning Guide for Seniors and Their Caregivers ]

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