By Alan Mozes Health Day Reporter
MONDAY, Sept. 19, 2022 (HealthDay News) — As Americans age, millions eventually struggle with dementia or some level of memory impairment and a reduced ability to think clearly and make decisions.
Yet a new study indicates that despite these serious challenges, many seniors continue to manage their own finances, often alone, and despite the difficulties they have in doing so.
“There has long been an interest in the difficulty of making financial decisions faced by older people with cognitive impairment,” noted the study’s lead author, Jing Li, an assistant professor of health economics at the University. University of Washington in Seattle. But his team was surprised by the high percentage – 75% or more – who nevertheless seem to manage their own finances.
“Many of them report difficulties in managing their finances and live alone, while owning a large amount of risky assets,” Li said.
To explore the question, his group looked at data from a representative survey of American adults in 2018. They focused on nearly 8,800 men and women aged 65 and older whose cognitive health status (memory and thought) could be established. Statistically, this group was representative of nearly 51 million American seniors.
Just over half (55%) were women, aged 74 on average.
In total, about eight out of 10 people had not yet experienced cognitive impairment.
But almost 6% had dementia and around 14% had experienced some level of reduced thinking ability – otherwise known as ‘non-dementia with cognitive impairment’ (CIND). Taken together, this group of one in five participants represented about 7.4 million Americans, the team said, and was more likely to include relatively older seniors, black or Hispanic men and women and less educated people.
Still, most participants overall said they continued to manage their household finances. And of those who did, nearly 57% of people with dementia and 15% of those with CIND described the process as difficult, the study authors noted.
To compound the problem: more than 40% of seniors who said they managed their own finances also lived alone.
And, according to the researchers, the stakes are high.
About a third of people with dementia or CIND reported holding a significant amount of “risky assets”, such as stocks and loans.
For example, stock portfolios had a median value of $215,000 in people with dementia, meaning half was larger, and around $125,000 in people with CIND, according to the study.
That means proactive planning is a must, Li said.
“This includes both early detection of cognitive impairment and early financial planning – appointing a financial representative or surrogate decision maker – to prepare for the event where one might lose cognitive ability” , she said.
The situation can be particularly tricky for those with thought disorders but not yet dementia, Li said, as they may be unaware of their difficulties managing their finances.
As for those with dementia, Li said more research is needed to find the best interventions to manage money management. Possible interventions could include involving extended families, seeking financial advice and switching to simpler financial products, she said.
“America must heed this call for help,” said Karlawish, a professor of medicine at the Penn Memory Center at the University of Pennsylvania Health System in Philadelphia. “The large proportion of people with dementia managing their finances and reporting difficulty doing so is a frustrating, if not frightening, finding.”
In his editorial, he says it’s important for those who work with older people to ask them a simple question: “Do you have difficulty managing your finances?”
Often, he writes, the question is instead asked of someone else — such as a spouse or child — who is expected to be accountable for the patient’s performance.
A person who is struggling to manage their finances may need a mental retardation assessment, Karlawish noted.
And, his editorial suggested, bankers and lenders should ask customers if they need help and should offer services to help them.
“America must establish a reliable system of ‘whealthcare,’ one that integrates the monitoring and maintenance of health and wealth, and thereby promotes the financial security and well-being of older adults,” said Karlalawish said.
Financial security is especially important for older Americans living with cognitive impairment, the editorial points out, because they may require years of costly long-term care and support.
SOURCES: Jing Li, PhD, MA, assistant professor, health economics, comparative health outcomes, Institute of Politics and Economics, University of Washington, Seattle; Jason Karlawish, MD, professor of medicine and co-director, Penn Memory Center, University of Pennsylvania Health System, Philadelphia; Open JAMA NetworkSeptember 13, 2022, online
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