A new study from the US reveals that long before people develop Alzheimer’s, they often exhibit signs of cognitive decline by falling behind on mortgage payments, credit card bills and other financial obligations.
The evidence is revealed in a joint study from a team of economists and medical experts that include the U.S. Federal Reserve Bank of New York and Georgetown University. They used a combination of the Medicare records (this is a U.S. federal health insurance for people 65 or older) and financial data from Equifax (a US-based credit reporting agency). They examined how people’s financial behaviour, including borrowing changed in the years before and after the diagnosis of Alzheimer’s.
The findings of the research are both detailed and concerning: Personal credit scores among people who later develop dementia begin falling sharply long before their disease was identified formally. For example, a year before diagnosis, people that developed the disease were 17.2 percent more likely to be reported late on their mortgage repayments than was the case before the onset of the disease. Furthermore, 34.3 percent are more likely to be delinquent on their credit card bills. But that is not all: The study identified strong evidence of people falling behind on their debts five years before diagnosis.
The results of the study provides clear evidence that in the years before diagnosis of the disease, there are clear behavioural changes and a deterioration in financial control.
The research adds to a growing body of evidence that decision-making on financial matters can begin to deteriorate long before a diagnosis is made or even suspected. People who are starting to experience cognitive decline may miss payments, make impulsive purchases or put money into risky investments they would not have even considered before the disease.
“This is far more than just missed payments on a mortgage or credit card bill” said Mr. Frank Conway, Founder of MoneyWhizz, the financial wellbeing initiative. “The study offers strong evidence that changes in attitude to risk tolerance and trust can lead to bad investment choices”.
This can have far reaching consequences. For example, people in the early stages of the disease will be vulnerable to scams and fraud. This can lead to some devastating financial outcomes, including a severe loss in financial resources which can destroy a person’s financial wellbeing.
“This report from the US provides clear evidence that challenges faced by senior citizens there are also highly likely to appear in Ireland at some point in the future, if they are not already present. As a result, it is imperative there is strong collaboration between the State, medical experts, and financial institutions to ensure every measure is taken to protect the most vulnerable.” said Mr. Conway.
Frank Conway is a Qualified Financial Adviser and Founder of MoneyWhizz. He is now offering his Preventing Fraud & Financial Exploitation in Retirement through select employers and community groups.
Note: The US report authors had access to health and financial data on nearly 2.5 million older Americans with chronic health conditions, roughly half a million of whom were diagnosed with Alzheimer’s or related disorders.
Comments are closed.