The Elephant in the Room

~ By Gerald Rome, Colorado Securities Commissioner ~

A topic that is difficult to talk about as we age is how to prepare for the potential of diminished mental capacity and your financial health. As the baby boomer generation continues to reach retirement and beyond, it’s certainly something that needs to be addressed. Some signs of decreased mental health can become obvious in older adults once they become overly forgetful, fail to take care of themselves physically, or are easily confused. But an aspect of diminished capacity that is less overt, though no less worrisome, can be detected in how one deals with finances. Maintaining financial health becomes difficult even when older adults are dealing with what doctors call mild cognitive impairment. Mild cognitive impairment, or MCI, involves problems with memory, language, thinking and judgment that are greater than normal age-related changes.

Doctors say that MCI affects about 20%, or one in five, of those over the age of 65. While those who have MCI are not affected in most areas of daily life, it creates difficulties with even minor mathematics, like addition and subtraction, increases one’s willingness to take risks with money, and makes one even more susceptible to financial abuse by another.

Gerald Rome, Colorado Securities Commissioner

Gerald Rome, Securities Commissioner

While friends and loved ones of an adult suffering from MCI won’t immediately notice a decline in personal hygiene, general memory function, or isolating tendencies, if we pay attention we may notice that once easy financial tasks have become difficult Ðfor example, figuring out how much to tip at dinner. Research shows that adults with MCI are four times more likely to make mathematical errors than those without it. Additionally, an adult’s willingness to make risky investments, purchase things they really can’t afford, or give money to others greatly increases with MCI. This is a particular problem in retired adults, as they don’t have the time or ability to recoup losses. It also makes them more vulnerable to financial abuse by others, whether by caretakers, financial professionals, or strangers. And make no mistake, financial abuse affects more than one’s bank account: research shows that seniors who are victimized by investment fraud have a mortality rate that is three times higher than those who are not abused.

So what can we do to help prevent the loss of financial stability due to the effects of MCI that occur in many of us? The most important thing is to be vigilant. With ourselves and others, it’s vital that we watch for the signs that occur below the surface: does your friend or spouse seem confused when trying to perform even minor mathematics? Does he or she seem to be spending more money on frivolities? Has his or her investment style changed drastically to incorporate more risk? If you do notice these signs, it’s important to bring up the subject delicately; one of the most common reasons we hear for why seniors don’t report fraud or abuse is out of embarrassment or fear of loss of independence. It is important that if you don’t feel you can handle the conversation with someone who has these symptoms on your own that you bring in a trusted ally, whether it be a doctor, adult child, or financial professional. And, as always, if you have concerns that a friend, a loved one, or even you yourself have become the victim of fraud or abuse, report it the Securities Division by calling (303) 894-2320, or visiting our website at

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