A recent New York Times article sums it up nicely – one of the first skills to go is the ability to handle financial matters. With age comes a greater risk of making costly mistakes or falling for financially abusive schemes.
Recent census data indicates that about 45 million people are 65 or older in our country, which works out to 14 percent of the population. As of 2013, that percentage was similar in Colorado at 12 percent. These numbers are set to increase substantially in the next 10 years as baby boomers retire.
Because the loss of financial skills can be subtle indicator of cognitive decline, it is important to have a Financial Power of Attorney also called a Durable Power of Attorney that allows a trusted individual to step in to offer assistance.
The ability to solve problems declines over time and diminishes more rapidly in the 70s. By the 80s, researchers estimate that roughly half of the people who live this long have some amount of cognitive impairment or dementia.
The National Endowment for Financial Education lists many warning signs related to financial decline. Here are three of them that might indicate it is time to have a conversation:
- Trouble calculating an appropriate tip at a restaurant
- Failure to make timely payments or deal with overdue notices
- Difficulty correctly identifying financial risks or understanding concepts like a medical deductible
Because it is often difficult to notice these subtle changes yourself, it is important to have a plan that ensures a trusted relative or friend can step in to pay bills and manage assets when you are no longer able to yourself. An experienced estate planning attorney can assist you to create a tailored plan that provides peace of mind.
Source: New York Times, “As Cognition Slips, Financial Skills Are Often The First To Go,” Tara Siegel Bernard, Apr. 25, 2015.