Aging and Your Financial Health

Aging and finances

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An 82-year-old woman is increasingly irritable and paranoid about money. She refuses to sign a check for new hearing aids, saying they are too expensive. But her bank calls her son about questionable transactions after she orders duplicates of expensive appliances.

A 71-year-old man is diagnosed with cancer. His girlfriend persuades him to change his estate plan so that all his assets go to her instead of his kids.

Early in my career as a psychiatrist, a female patient in her early 70s came to me for help with chronic anxiety. She lived with her husband in a nearby rural town. She had been defrauded out of her life savings by overseas con artists. The scammers had contacted her by phone and had created an elaborate (and fake) story to exploit her loneliness. Over several months, they requested money to pay for various “family emergencies,” travel expenses, and other schemes. Eventually my patient's adult children discovered evidence of what was happening—but by then, the scammers had already swindled her out of tens of thousands of dollars. Even after learning that she had been deceived, she still considered the scammers “friends” and wanted to continue communicating with them. This woman’s behavior was incomprehensible to me, at the time; her intelligence and performance on cognitive screening was in the normal range. I have since learned much about the psychological dynamics of elder financial abuse, and the varieties of manipulation in situations of undue influence.

I learned more about elder financial exploitation in my clinical work, expert witness consulting, and the professional literature. In 2019, I published The Clinician’s Guide to Geriatric Forensic Evaluations to help medical professionals like me do a better job of assessing older adults' decision-making capacity.

Older adults, especially those over age 85, make up a rapidly growing sector of the U.S. population. Aging is a healthy, normal part of life. It brings positive changes, but it can also bring impairment in health, cognition, and physical fitness.

Cognitive decline, the progressive impairment of memory, attention, language, and problem-solving abilities, is a major risk factor for older adults being financially victimized. The most important cause of cognitive decline is dementia—a decline in cognitive functioning to the point that it causes a loss of independence. The prevalence of dementia is rising dramatically, posing enormous challenges in families worldwide.

Early cognitive decline can be subtle, with mild impairment enduring for months to years. Diminished financial capacity in its early stages is often poorly recognized by family and clinicians. Even when there is no obvious cognitive impairment, there are changes in the brain due to aging that create the conditions for poor financial decisions.

Elder financial abuse is common. It can include undue influence—for example, getting a vulnerable older adult to change their will and leave assets to the influencer. Undue influence is the legal term for someone supplanting another person's free will, in which the influencer uses their power and authority to take advantage of a vulnerable individual.

Practical and ethical challenges abound for older adults with cognitive decline. Well-intentioned observers and practitioners often identify older adults as a vulnerable group, but ageism can also lead to dismissive and harmful attitudes toward older people. Guardianship practices, if applied inappropriately, can lead to abuse, rather than protection, for older adults. Alarmingly, a person subject to guardianship usually has fewer rights than a convicted felon. As the high-profile dispute over the guardianship of Britney Spears showed, once in place, a guardianship is difficult to overturn. Balancing risk and autonomy ranks among the toughest tasks faced by medical professionals, caregivers, and the court system.

Many elders maintain financial capacity into old age. It is critical to respect the strengths, wisdom, and competent wishes of older adults to the greatest extent possible, while supporting and protecting those who are vulnerable. As some older adults and their families learn the hard way, cognitive decline can take a toll on a person’s and a family’s financial health.