Managing cognitive decline

The challenges are emotional and financial. How to spot dementia early and learn to cope.

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Many of us have experienced the heartbreak of watching a loved one’s memory and connection with family and friends slip away. Today, an estimated 5.4 million Americans suffer from Alzheimer’s disease, and experts expect that number to increase rapidly as the baby boomer generation ages.1

"Alzheimer’s disease is the sixth leading cause of death in the U.S. and is estimated to affect 16 million people by 2050,” says Ruth Drew, director of family and information services at Chicago-based Alzheimer’s Association. “One in nine individuals over the age of 65 and one-third of people over age 85 are likely to be touched by this disease.”

Alzheimer’s is one of the main forms of dementia, which involves impaired brain function, the loss of short-term memory, and trouble completing even basic, familiar daily tasks. Caring for family members with this disease can take an emotional as well as financial toll on families. Arranging for the care of a person suffering from dementia can be complex and expensive. Adding to that complexity, patients are often unable to manage or understand their finances.

What can families do? Although there is no cure for these types of illnesses, there are steps you can take now to identify and reduce the impact of dementia on those affected. “Preparing for any kind of imminent family challenge is always going to be hard, but starting the dialogue in the midst of a crisis is suboptimal. The best prevention is an early conversation within the family,” says Suzanne Schmitt, vice president of family engagement at Fidelity.

She adds, “Family members and close friends are in the best position to identify signs of cognitive impairment. Start early. The more tuned in you can be to your loved one’s health, the more likely you’ll be to notice changes early and plan accordingly.”

When is a change a sign of dementia?

When a loved one shows signs of a change in judgment or memory, the first step is to determine whether it’s a normal sign of aging or something else. Many of us will experience some type of cognitive impairment as we age. Indeed, many older people find their short-term memory is less sharp, and it’s more difficult to multitask (see table below).

Signs of Alzheimer’s/dementia Typical age-related changes
Poor judgment and decision making Making a bad decision once in a while
Inability to manage a budget Missing a monthly payment
Losing track of the date or the season Forgetting which day it is and remembering it later
Difficulty having a conversation Sometimes forgetting which word to use
Misplacing things often and being unable to retrace steps to find them Losing things from time to time
Source: Alzheimer’s Association.

Losses in memory, attention, or problem-solving ability aren’t necessarily signs of dementia. So how can you tell whether these cognitive changes are more serious? The Alzheimer’s Association, a national support and research organization, offers 10 tips for identifying Alzheimer’s disease. They include looking for personality and mood changes, decreased or poor judgment, and confusion with time or place.

Regular check-ins and conversations with your loved one also can help identify problems early. Look for changes in his or her normal routine. Piles of unopened mail and unpaid bills may be a sign that something’s wrong. You can also encourage your loved one to take you to an appointment with his or her primary care doctor so you can better determine whether there’s been any change in his or her health or adjustments to prescriptions.

Trusted professionals such as financial advisers or accountants may be in a position to notice changes in long-time clients. For example, reviewing assets and investments may be difficult to do for someone with a cognitive impairment.

Medical professionals play an important role in determining whether cognitive issues are early signs of dementia or are simply normal signs of aging. Specialists such as geriatricians and neurologists have expertise in identifying dementia, including Alzheimer’s.

The impact on a family caring for a loved one with Alzheimer’s can be dramatic, according to Drew. “On average, people live four to eight years after a diagnosis. But some people can live up to 20 years more, depending on the kind of medical care they receive, the quality of their treatment facility, and how fast the disease progresses in the brain.”

When it comes to planning for health care expenses, Drew recommends that people work with their financial advisor to determine Long Term Care insurance coverage options. “Remember, Medicare does not pay for long-term care. You can’t be admitted into a skilled nursing facility just because you’ve been diagnosed with Alzheimer’s. If you have a family history of this brain disease, additional coverage may provide access to a better facility or more comprehensive treatment options. Some policies may cover home health care, but many do not, so do your homework,” adds Drew.

Drew concluded, ““As the largest nonprofit funder of Alzheimer’s research, our hope is that innovative drugs and treatment options can be developed to slow progression of Alzheimer’s and one day cure it. For now, there are steps people can take to enhance brain health. A nutritious diet, physical activity, social engagement and mentally stimulating pursuits have all been associated with helping people stay healthy as they age. These factors might also help reduce the risk of cognitive decline and Alzheimer’s disease.”

Tip: Call the Alzheimer’s Association 24-hour help line at 800-272-3900 or visit to tap into a variety of caregiver and family resources.

Start talking early

Conversations about aging can be difficult, but they’re also critically important—particularly from a financial perspective. For instance, if a loved one is suffering from some sort of cognitive impairment, it may be very difficult to protect his or her finances if estate planning tools such as powers of attorney aren’t already in place. “We recommend being proactive,” says Schmitt. “You don’t want to be dealing with these issues when cognitive problems are already taking place.”

Unfortunately, if a loved one’s disease progresses and his or her ability to think and share thoughts declines, it will become more difficult for your loved one to express his or her wishes. And yet, knowing those wishes will be a critical guide to help you through the many decisions that you may have to make.

“Most people feel they have all the time in the world to have these conversations,” says Harriet Warshaw, executive director of The Conversation Project, a Massachusetts-based nonprofit dedicated to helping people talk about their wishes for end-of-life care. “Yet we know that life is unpredictable; stuff happens. So we recommend you have the discussion about end-of-life care early. Gather your family members together to hear what matters most to your loved ones--all at the same time.”

Here are some tips for starting conversations related to aging and cognitive decline:

  • Keep it low key. Talk with your aging parents or spouse in a quiet atmosphere without a lot of visual stimulation. Avoid talking about these issues over dinner at a noisy restaurant or at the airport. Instead, find a quiet time at home to start the discussion.
  • Choose your words. The language you use makes a difference. Convey your concern for the individual. Don’t make the person feel overwhelmed or browbeaten. Offer to help by partnering with him or her.
  • Be specific. If you’re concerned about a loved one’s cognitive decline, try to cite specific examples of times you noticed it. Perhaps your parent or spouse forgot his or her brother’s name, or couldn’t remember the name of the bank he or she uses.
  • Keep the discussion focused. Go into the conversation with a solid agenda and, if possible, agreement among other family members about how to handle the situation. Meet with your siblings and other family members in advance to discuss long-term- care options and other strategies to make sure you are all on the same page.

Tip: Remember this is not just one discussion. It is a series of conversations the content of which may change over time. For ways to begin the conversation with your loved ones, read The Conversation Starter guide.

Warning signs to watch for

Adult children’s engagement in their parents’ financial affairs typically ramps in response to age and changes in health and mobility. Parents’ ability to remain independent erodes in their 70s. There are three "tipping points" that adult children should be aware of that may signal the need to step in and get involved in a more direct fashion with the finances:

  1. When a parent or loved one makes a direct request for help managing his or her finances.
  2. When age starts to become a significant factor. On average, children step in when parents are 75 years old.
  3. When there is awareness of a change in circumstances. This can be the hardest change to detect, particularly when a health decline is gradual.

"The process of comfortably and thoughtfully moving from independence to interdependence is critically important," says Schmitt. "Building a strong family financial safety net can help parents to maintain their current lifestyle for as long as possible, preserve their assets, and may increase the likelihood they won't fall victim to fraud. Best of all, most parents appreciate the assistance, so it can help forge stronger bonds."

She adds, “Everyone should assemble a team of trusted friends, family and professionals who understand your concerns, priorities, and personal balance sheet. Be prepared to step in when help is needed. Everyone’s circumstances are different, but as a basic rule of thumb, embrace the rule of 50/75: By the time you’re age 50 or a have loved one who is age 75, here are five things to consider.”

  1. Have designated beneficiaries on bank accounts, investments, insurance policies, etc.
  2. Ensure that your will is current and complete.
  3. Assign a health care proxy. This names the person you want to make decisions for you if you can’t– and review with him or her.
  4. Create a living will. This provides instructions on the kinds of care you want to receive.
  5. Scan and store your legal documents, including passwords and a list of trusted advisors (e.g., financial adviser, attorney, CPA) and share with your loved ones.

Learn more

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1. Alzheimer’s Association, 2016 Alzheimer’s Disease Facts and Figures.
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