When Philip Lehman's then-80-year-old mother, Enid, and 85-year-old stepfather, David, moved into a new condominium in Milford, CT, in 2020, he knew both showed early signs of cognitive impairment. But he had no idea about its extent until their cars were repossessed several months later.
“I'd walk into their home and see stacks of mail, but I didn't pay much attention to it, especially since both of them were good at masking any signs of dementia,” Lehman, 53, recalls. “They'd talk about how they wanted to get a dog or go biking or skiing together, so I assumed they were fine. But once their cars were repossessed, I had to do some digging. It turns out they hadn't paid their bills for months or filed their taxes for years.”
Lehman convinced the couple to grant him general power of attorney so he could step in and pay all their bills. But even that became fraught. “I had taught my mother how to order groceries online, but several times she spent hundreds of dollars on them a week. When I checked, I found that she had bought things in duplicate—for example, six gallons of ice cream that couldn't fit into her freezer, or jars and jars of peanut butter that cluttered up her pantry,” he says. A couple years ago, he moved them into an assisted living facility. If they need anything, they let Lehman know, and he orders it for them. “When I lost my father 25 years ago, he was 74 and as sharp as a tack,” Lehman says. “I never imagined my mother and stepfather in this situation.”
Neither did Allison Wohl. The 51-year-old was shocked when, in 2014, one of her father's law partners called her to tell her he hadn't filed or paid the family's taxes for three years. “Most of my dad's practice was taxes and estates, so the fact that he hadn't taken care of his own was very worrisome,” says Wohl, who lives in Bethesda, MD.
When Wohl called her father, Paul, he became defensive. “We had this tense phone conversation where I asked him if he would give me power of attorney, and he refused,” she says. “Then he paused for a moment and said, ‘I bet this was a hard phone call for you to make.’ I told him yes, and then he told me he'd go to his office the next day and file the paperwork needed to give me power of attorney.” A few months later, he was evaluated and diagnosed with Alzheimer's disease. Wohl managed his affairs until he died in 2017.
These are common occurrences. More than 7 million older adults are left to manage their household finances despite having cognitive impairment or dementia, according to a 2022 study published in JAMA Network Open. While many of them reported trouble managing their money, they also owned risky financial assets susceptible to mismanagement because of their cognitive difficulties.
“As people age, changes occur in the parts of the brain responsible for executive functioning [affecting their thoughts, emotions, and behavior], even if they don't have a condition like Alzheimer's,” explains Jason Karlawish, MD, professor at the University of Pennsylvania and co-director of the Penn Memory Center. Changes also occur in judgment, insight, and emotional processing, which can make older adults more vulnerable to financial scams, he adds. According to the FBI Internet Crime Complaint Center, Americans 60 and older reported roughly $3.4 billion in total fraud losses in 2023, with the average loss per case almost $34,000.
The Changing Brain
The brain's prefrontal cortex—the part that helps with executive function—naturally shrinks with typical aging, says Sarah Getz, PhD, instructor of neurology at the University of Miami Miller School of Medicine Comprehensive Center for Brain Health. “Your memory, problem-solving, and decision-making abilities all decline with age,” she explains. This helps to explain why older adults occasionally forget a bill payment or even accidentally pay a bill twice.
Depression also may play a role in financial mismanagement. Each type has a distinct duration and set of symptoms, and some have clearly identified causes. The most common is major depressive disorder, which is marked by chronic sadness; loss of interest in normal activities such as work and relationships; and physical symptoms such as fatigue or changes in appetite, lasting at least two weeks, says Nada Kais El Husseini, MD, FAAN, associate professor of neurology at Duke University School of Medicine in Durham, NC.
But these changes can occur even faster, and are more pronounced, in people with Alzheimer's or other dementias, Dr. Getz stresses. A study published in September 2024 in the journal Cerebral Cortex offers some clues as to why that happens. Researchers conducted MRI scans of the brains of 97 people over age 50, none of whom had signs of cognitive impairment. But those who had thinning of the entorhinal cortex—the first region of the brain to show changes in Alzheimer's disease—were more likely to make poor financial decisions. This was especially true for people 70 and older.
This can have devastating results. Dr. Karlawish recalls a patient who got caught up in an email-based lottery scam that drained his bank accounts. “He had to be placed under a financial conservatorship to remove his ability to manage his own money, as he lost hundreds of thousands of dollars,” he says.
For years, Helayne Celano ran a bookkeeping business with her husband, Vinny, now 78, in Spring Hill, FL. “He'd always been brilliant with numbers and could do all kinds of calculations in his head,” says Celano, 69. Then, around early 2022, she noticed mistakes in his work that began to worsen over time. “It got to the point where I had to review everything he did because there were constant errors,” she recalls. “He'd miscalculate a client's income from a sale or record a financial transaction incorrectly.”
His doctor dismissed it as age-related, but Celano listened to her gut and had a neurologist evaluate Vinny. He was diagnosed with Alzheimer's disease in April 2023. “If I hadn't been in business with my husband, I probably wouldn't have noticed it until much later,” Celano acknowledges. “Even today, he plays pickleball most days of the week and helps me around the house. But those books were a mess.”
These kinds of subtle financial mistakes occur often among people in the early stages of dementia, says Ian McDonough, PhD, an associate professor of psychology at Binghamton University in New York. A study McDonough published in 2024 in the Archives of Gerontology and Geriatrics used MRI scans to analyze the brains of seemingly cognitively healthy adults ages 50 to 74 and then had them engage in simple financial tasks, such as balancing a checkbook. “When you do mathematics, you use two different brain regions,” he explains. “The first is the inferior frontal gyrus, which accesses math information you've memorized from years of rote learning, like ‘three plus three.’ The second is the middle frontal gyrus, which allows you to perform calculations.”
When people start to develop dementia, their inferior frontal gyrus begins to shrink first, Dr. McDonough notes. As a result, they need to rely on their middle frontal gyrus, which requires more brainpower. “Over time, as their middle frontal gyrus shrinks, their math capabilities decline even more,” he says.
Tracking the Signs
Spotting the signs of mild cognitive impairment or early dementia can be tough, but loved ones can look out for these red flags.
Unpaid Bills
Natalia Abdalah became concerned about her mother, Maria, when she began to struggle to remember whether she had paid certain bills. “I would fly up to visit her at her home in Brooklyn, NY, and see all these loose bills lying around,” says Abdalah, 52, who lives in Mansfield, TX. When she asked her mother about them, Maria, now 78, would struggle to remember whether they'd been paid.
A 2024 report published by the Federal Reserve Bank of New York found that a person's risk of falling behind on bills grew as early as five years prior to being diagnosed with Alzheimer's disease and related dementias. In addition, they were about 17 percent more likely to miss mortgage payments and about 34 to 52 percent more likely to be delinquent on credit card bills a year before their diagnosis.
Overspending
People who begin to experience cognitive changes may overspend, although most of the time it's on relatively small items, says Peter Lichtenberg, PhD, director of the Institute of Gerontology at Wayne State University in Detroit, MI. A 2024 study he published last year in the journal Clinical Gerontologist, involving 150 people between ages 59 to 96, found that early memory loss predicted excess spending. “It wasn't impulsive spending, like going out and buying a BMW, which many people associate with memory loss,” he explains. “We found that people were doing things like … paying for an insurance policy that they didn't need anymore. They just weren't keeping track of individual expenses, so they didn't even have a good sense of cash flow coming both in and out of their bank accounts.”
Looking back, Abdalah noticed similar spending patterns in her mother. “There were never any big financial purchases; it was more like she'd go to tag sales around the neighborhood and pick up a lot of very inexpensive stuff she didn't need,” she recalls. “Anytime she saw one of her grandkids, she'd give them $10 or $20 as ‘allowance.’ It was never big amounts, but it was enough to get onto my radar.”
Scam Susceptibility
Older adults who were less aware of scams were more likely to develop either Alzheimer's disease or mild cognitive impairment than those who were more wary of them, according to a 2019 study published in Annals of Internal Medicine. “People are embarrassed to admit when they're a victim of a scam, which means it often goes unreported, especially among older adults,” says Dr. Getz, who has done research in this area.
Dr. Getz has developed a tool called the Assessment of Situational Judgment that measures a person's susceptibility to fall for a financial scam. It consists of 17 questions, eight of which are actual scams and nine of which are legitimate scenarios. People then rate their likelihood to respond using a seven-point scale ranging from extremely unlikely to extremely likely. “The hope is that health care providers will begin to use it in order to get a sense of how vulnerable a patient is to scams and to guide interventions,” Dr. Getz explains. “If someone seems very susceptible, financial safeguards can be put in place, like dual authorization on credit cards and bank accounts for significant transactions.”
Financial Abuse
People with early memory loss also are more likely to be taken advantage of financially by others, including family and friends, according to a study conducted by Dr. Lichtenberg and colleagues that will be published later this year in the journal Alzheimer's and Dementia. They saw many instances in which an adult child took advantage of their older parent, which depleted the parent's savings, he says.
Staying Safe
It can be tough for people in the early stages of cognitive decline to recognize that a problem exists and to seek help. Here are some ways to be proactive.
Watch for Warning Signs
It's important to stay alert for warning signs of financial struggles, says Elizabeth Edgerly, PhD, senior director, community programs and services, at the Alzheimer's Association. Things to look for, she adds, include unopened or unpaid bills; new, unexplained purchases on a credit card bill; and money missing from a bank account.
If you notice any of the above, Dr. Edgerly recommends that you discuss it with your loved one. “It can be as simple as asking if you can check bank statements every month,” she says. “Make sure that you stress that it's a collaborative effort, where you both go through it together to check for anything that doesn't seem right.
Seek a Medical Evaluation
If you do see any of the above signs, make an appointment to see a neurologist. While you can do some self-administered assessments online, they don't take the place of an in-person appointment, says Dr. Karlawish. If possible, make sure at least one family member or close friend comes along. “It can help us get a sense if there have been significant changes in judgment and decision making,” Dr. Karlawish explains. “Sometimes, a person will say they are fine, but their loved one says that they've noticed that the patient stays on the phone with unknown callers who in the past they would have hung up on or spends a lot of time going through junk mail for fraudulent solicitations that should just be thrown away.”
Set Up Automated Bill Payments
Even if you or a loved one aren't showing active signs of cognitive decline, it's a good idea to sign up for as many automated bill payments as possible. “You want to minimize the cognitive load of older adults as much as possible so that they can focus their brain on other things,” Dr. Getz points out. Other ways you can help an older adult manage their finances include canceling unneeded credit and debit cards and setting up automatic weekly grocery deliveries to reduce the chances of overspending.
Take Steps Against Fraud
Sign up for a credit monitoring service and make sure that the older adult has registered to receive fraud alerts from their bank and credit card companies. You also can add their phone number to the National Do Not Call Registry. This will help cut down on telemarketing texts and calls they receive at home and on their cell phone. Apps are also available that can block or eliminate scam calls. iPhone and Android phones also have a setting in which users can silence unknown callers so only numbers in their contacts list will ring.
Generally, the only institutions that need your Social Security number are federal or state governmental agencies, employers, and financial institutions. You don't need to provide it to get medical care or buy anything. Keep your Social Security card and documents that include your Social Security number in a safe and secure place in your home.
Discuss Financial Planning
If a loved one has dementia, or you suspect that they may have dementia, it's important to meet with an elder law attorney and possibly a financial adviser, too, Dr. Edgerly says. “It sometimes helps to have someone who's completely impartial explain things to a family,” she says.
Wohl knows that firsthand. “When my dad developed dementia, I found an elder law attorney to get his affairs in order and to make sure my mom was taken care of,” she says. “The first thing I said to her was, ‘My dad still thinks I'm 12.’ She said, ‘I understand. I also have a dad.’ But she was able to talk to him and get the job done.”
Keep Your Loved One's Financial Paperwork Handy
This can include sources of income and assets, like a pension, IRA, 401(k), and investments; bank names and account numbers; insurance information; and a copy of their most recent income tax return.
If Appropriate, Set Up Power of Attorney
People with diagnosed dementia should grant someone power of attorney, advises Dr. Edgerly. The legal document allows another person to manage the patient's financial affairs when they no longer can. They can set this up so it only becomes active when the person can no longer make decisions on their own.
Patients also should set up a living trust, which names someone as trustee to hold and distribute funds on their behalf when they cannot. (The same person can hold both roles.) Court-appointed legal guardianship also is an option.
Although these scenarios may be hard to think about, it's important to act early, while the person with dementia can still make decisions, Dr. Edgerly says. Wohl agrees. “It can be hard to have these conversations, especially if you're talking to a parent who in many ways still sees you as a child,” she says. “My dad was very private and never wanted me in his financial business. I'm glad I was able to convince him to give me power of attorney before it was too late, so I could make sure both he and my mother, who also later was diagnosed [with] and died of dementia, were taken care of. People need to recognize they need to make these decisions early, while they can.”
Brush Up on Financial Skills
If you notice that it's harder for you to keep track of your finances and make money-related decisions, you can do a few things to help keep your mind sharp, says Ian McDonough, PhD, an associate professor of psychology at Binghamton University in New York.
Practice Your Math
Remember those multiplication flashcards you used in elementary school? They can serve a purpose now, too. “They help to strengthen your rote memory, which is what you often rely on for daily financial tasks,” Dr. McDonough explains.
Get Educated
Financial education can help keep your brain sharp, notes Dr. McDonough. One option is the FDIC's Money Smart Program for Older Adults, which covers topics including scams and identity theft.
Use a Budgeting App
Apps such as You Need a Budget, Every Dollar: Budget Tracker, and Rocket Money can teach financial skills as well as help you manage your money.
