Financial Signs That Could Indicate the Onset of Cognitive Decline

Oh, the joys of aging! Statistically, as we age, the risk of cognitive decline, including dementia and Alzheimer’s, becomes a more prevalent concern.

While these conditions often begin subtly, financial behavior is one of the first areas where early signs might appear. Also, keep in mind that cognitive decline doesn’t always discriminate by a “certain” age. Age-related or other health-related cognitive decline can begin at any time, so these warning signs apply to anyone. As your financial team, we watch for this, but you also play a key role in this as well.

Recognizing these changes is crucial for investors and their loved ones, as declining financial acumen can lead to costly mistakes and vulnerability to fraud. Below are key financial warning signs that could signal the onset of cognitive decline.

Difficulty Managing Finances.

One of the first signs of cognitive impairment may be difficulty managing day-to-day financial tasks. Someone who was once adept at tracking spending, paying bills, and budgeting may struggle to keep up with these activities or forget essential obligations, leading to missed payments or erratic spending.

Unexplained Financial Decisions.

Uncharacteristic or irrational financial decisions can also be a red flag. This might include withdrawing large sums of money without a clear purpose, making risky investments, or donating to unfamiliar charities. These behaviors could signal impaired judgment or memory lapses.
Increased Vulnerability to Scams. Older adults in the early stages of dementia or Alzheimer’s are often more susceptible to financial or health scams. Scammers frequently target those who appear confused or disoriented. Family members should watch for unexplained withdrawals, unusual purchases, or phone calls from unfamiliar individuals or organizations.

Difficulty Understanding Financial Concepts.

Investors with cognitive decline may begin to have trouble understanding financial concepts, such as portfolio performance or tax implications, that they had previously been comfortable with. This can lead to inappropriate decisions that could jeopardize long-term financial security. Keep an eye out for questions that seem rudimentary or previously known.

Sometimes, the signs of cognitive decline lean into the qualitative, but you know your loved ones best, so trust your gut. By recognizing these early financial warning signs, families can take proactive steps to safeguard the financial well-being of older investors while seeking medical evaluation and assistance. In the meantime, we’re going to focus on those smile lines!