The signs often start small. Maybe Dad wired money to a “grandchild in jail” who turned out to be a scammer. Or Mom invested hundreds in questionable supplements. For millions of families, these scenarios aren’t just cautionary tales — they’re reality.
A study from the University of Michigan reveals a critical connection between cognitive decline and financial vulnerability in seniors. Researchers, who studied data collected from 1998 to 2014, found more than 60% of older adults experienced significant memory decline — typically a 20% drop in cognitive test scores over two years, the Wall Street Journal reported. Plus, 80% of those affected didn’t recognize their declining cognitive abilities.
The financial consequences can be severe. Seniors unaware of their cognitive decline lost an average of $31,000 over two years, while those who acknowledged their memory changes lost substantially less — around $5,400.
Franco Peracchi, of the University of Rome Tor Vergata, told the Wall Street Journal that formerly successful investors face particular risks.
“People participating in the stock market often start with high cognitive abilities, so after losing some memory, they may be overconfident in their abilities,” Peracchi said. “They’re not aware that they’ve lost memory, so they’re more susceptible to financial losses.”
Financial protection starts with early, positive conversations. Asset protection and estate planning attorney Thomas Vanness III told Scripps News instead of confronting a parent about memory concerns, try offering practical help, like “Would you like me to set up automatic bill pay for your accounts?”
By staying alert to early warning signs, like unusual purchases or confusion with routine financial tasks, and holding open discussions about money management, families may be able to help their loved one’s retirement savings remain secure.
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