Signs Your Aging Parents Need Help Managing Their Finances
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Experts say there are signs that children or spouses can watch out for that will help them know when it’s time to step in and help an older relative with their finances. |
It’s inevitable. As we age, our bodies and our brains change, and not always like fine wine. Cognitive skills decline as part of the normal aging process and in turn, so do some of our financial management skills.
Research shows that financial decision-making peaks around age 53, and by age 60 our ability to process new information starts to slow. The shift happens at a different pace for everyone, and it can be accelerated by medical conditions such as Alzheimer’s and dementia. While some people are capable of managing their own finances throughout their lifetime, others may find their skills suffering.
The impact could be as benign as paying a utility bill twice, or something worse, like falling prey to a scam.
Experts say there are signs that children or spouses can watch out for that will help them know when it’s time to step in and help an older relative with their finances.
“This will probably happen to someone you love or to you,” said Bill Hensley, director of education at the National Endowment for Financial Education. “The way to deal with it is to plan ahead. Plan ahead, prepare for the worst, put those safeguards in place.”
A new study from the University of Alabama, with support from the NEFE, has identified five signs that aging may be impacting someone’s financial decision making.
The study looked at up to seven years of financial skill performance among cognitively normal older adults. The warning signs of financial decline it found are:
— Taking longer to complete everyday financial tasks;
— Missing key details in financial documents;
— Having difficulty with everyday math;
— Showing decreased understanding of common financial concepts;
— Having difficulty identifying risks in an investment opportunity.
Seeing any of these signs doesn’t mean an elderly relative needs to have their checkbook taken away immediately. But they can be a warning that decline is occurring. And that can be a sign that help is needed.
“Hopefully we are helping people understand the importance of planning ahead so that you are not the victim of your own cognitive decline, or someone else taking advantage of that,” Hensley said.
Make a plan to improve your finances in 2017
Unfortunately, this planning often doesn’t occur until after an illness, death or other unfortunate event. But ideally, people should be putting plans and documents into place to protect themselves by midlife or earlier.