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Protecting the Financial Well-Being of Older Adults

June 15 was World Elder Abuse Prevention Day. Each year, senior advocacy groups from around the world take this opportunity to raise awareness of crimes against elders. The World Health Organization says that one in six older people experiences some kind of abuse. It might be physical or psychological—and increasingly, financial abuse of elders is a problem threatening the well-being of older adults.

Financial exploitation of the elderly is the illegal or improper use of funds, assets or property of an older adult. This could include outright theft, phony investment schemes, or “lonely hearts” confidence scams, where a stranger cultivates a relationship with an elder to induce them to hand over money and assets. The problem is so serious that a study from the MetLife Mature Market Institute called it “the crime of the 21st century.”

Stealing money from an elder’s bank account or tricking them by pretending to be the IRS are obvious instances of elder abuse. Just as serious, but sometimes less obvious, are swindles in which a senior is fooled into making poor financial choices. The swindler might be a family member, a “friendly stranger,” or an unscrupulous financial institution or business. The Investor Protection Trust found that over seven million seniors have been victimized by a financial swindle. Interviewed by the organization, 96 percent of financial, legal and medical professionals who deal with older adults said that this is a serious problem.

Brain imaging provides insights

Why are seniors victimized? They may be more trusting, they may want to help people, or they may be financially unsophisticated. And a key factor, say experts, is that certain changes in the brain can reduce a senior’s ability to manage money. Said Nina Silverberg, Ph.D., program director of the Alzheimer’s Disease Centers at the National Institute on Aging (NIA) “Novel neuroimaging studies, along with studies involving cognitive measures, are providing intriguing data on why older adults—even those who were previously quite savvy about finances—may lose their money-managing abilities.”

“It’s the $18.1 trillion problem,” said University of Alabama at Birmingham neurology professor Dr. David Marson, referring to the amount of household wealth among U.S. adults age 65 and older. “The money is at risk in part because of the cognitive disorders of aging.” He explained, “Imaging is increasing the depth of our scientific understanding of the brain. MRI helps us understand how changes in brain structure and connectivity drive downstream functional changes in everyday life. For example, when a person has trouble reading a bank statement, an MRI may reveal aspects of brain structure associated with that specific trouble.”

Family members should be alert

The NIA reports that having trouble managing money is often an early sign of Alzheimer’s disease or other dementia. And today, it’s not MRI scans but instead observant family members who usually first detect the problem. Family might note red flags, such as their loved one having trouble counting change, paying bills, or balancing their checkbook. Money may be mysteriously missing from their loved one’s bank account, or strange charges may show up on their credit card statement. Maybe they’ve fallen for a sweepstakes scam. Maybe they’ve made investments that are totally out of character.

Financial capacity diminishes gradually in most cases. “Just as neuroimaging is used as a biomarker for early Alzheimer’s disease, one could imagine researchers using MRIs to develop biomarkers for impaired financial decision making,” said Duke Han, Ph.D., an associate professor of family medicine, neurology, and psychology at the University of Southern California, Los Angeles. And ideally, says Han, “Scientists could find ways to strengthen the brain to keep seniors functioning better so they are less likely to become victims of financial abuse.”

What can family do?

For now, family caregivers should be alert for signs of financial exploitation of a loved one with dementia. Contact the police department or your local Area Agency on Aging office if you think your loved one is being victimized. If your loved one is no longer able to manage their money, it may be time to help. The goal is to protect your loved one’s money while preserving their independence as much as possible. You may need to take charge of your loved one’s finances through legal arrangements, such as a durable power of attorney for finances. The NIA reminds us, “It’s important to handle the transfer of financial authority with respect and understanding.”

Source: IlluminAge AgeWise with information from the Alzheimer’s Disease Education and Referral Center of the National Institute on Aging.

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