A new study published in JAMA Neurology reveals that older Americans begin to lose wealth in the years leading up to a formal diagnosis of dementia. The research indicates that the median household net worth of seniors decreased by over 50% in the eight years before their dementia diagnosis, significantly more than their mentally healthy counterparts. The study tracked 20 years of data from the Health and Retirement Study, comparing the financial health of individuals whose mental capacity remained stable and those who experienced probable dementia.
Interestingly, the study found that eight years before a dementia diagnosis, there was not a significant difference in median net worth between the two groups. However, as dementia onset approached, the average net worth of those with dementia dropped by over 50%, while the net worth of those unaffected by dementia declined only slightly. Liquid assets also suffered, with individuals affected by dementia seeing a sharp decrease in liquid assets compared to those without dementia.
The study did not explicitly examine the reasons behind the financial decline associated with hidden dementia but speculated that it may be due to deteriorating financial capability linked to cognitive decline, including vulnerability to fraud. Additionally, the need to pay for increasing medical and long-term care expenses or qualify for Medicaid coverage could contribute to the financial loss.
Further research is necessary to fully understand the factors contributing to financial decline in individuals with hidden dementia. The findings emphasize the importance of financial planning and protection for vulnerable elders, particularly as they age and their cognitive health may deteriorate.
– Comparative Health Outcomes, Policy, and Economics Institute at the University of Washington in Seattle
– U.S. Department of Justice