Often we will read or hear about an elderly person or couple unwittingly defrauded by a contractor, service provider or a family member, causing them to lose substantial money from their retirement savings. This kind of crime is known in general as financial abuse.
Seniors are particularly at risk for being financially abused. Sometimes this susceptibility is the result of diminished financial capacity, when aging conditions like Alzheimer’s or dementia impairs someone’s ability to make sound financial decisions. But older adults are often targeted also because they control the majority of the nation’s wealth. They frequently have homes which have appreciated over time, and they don’t realize the value of these assets.
Our last blog post explored diminished financial capacity, or the decreased ability to make sound financial decisions as we age due to cognition factors like dementia, Alzheimer’s or other illnesses. In this post we want to look at the numbers of seniors with cognitive impairments, what’s happening with these older investors and what families can do to help. We hope you find this information useful when putting together a plan for your aging loved one.
If demographic trends continue, the number of people with cognitive impairments (and in turn diminished financial capacity) will rise greatly in the coming years. By 2020, about 55 million baby boomers will join the older population. Within the elderly community, the number of people 85 and over is also growing quickly, and should reach approximately 6.6 million by 2020.
Alzheimer’s and other dementias are occurring more and more frequently. Trends predict that by 2050 there will likely be 13.5 million Americans 65 and older with Alzheimer’s. Other diseases are responsible for dementia, such as Parkinson’s or vascular dementia. Cognitive impairment gives people a lower quality of life, increased disability and increased neuropsychiatric symptoms, all of which contribute to the decrease of ability to make sound financial decisions.
Making sound financial decisions can be a challenge, even when you’re young. But as we age, cognition factors like Alzheimer’s, dementia and other illnesses can diminish our capacity to make good financial decisions. When you lose the ability to make good financial decisions, it’s known as diminished financial capacity, and it’s sometimes a hard thing to face.
Hopefully, you and your loved ones have a financial (and legal) plan in place in the event of a health decline. However, this is not always the case, so it’s crucial to understand what diminished financial capacity “looks like.”
If you notice an aging parent or loved one with credit difficulties, irrational purchases, inappropriate investments, unpaid bills or other major financial troubles, these could be warning signs that he or she is having a cognitive decline that leads to diminished financial capacity. In this state, a person is more vulnerable to dishonest people who may take advantage of them.
The cost of long term care is on the rise, and with all the things you have to save money for — college, retirement, buying a home, life insurance, investments, emergency funds and more — it’s a good idea to learn more now about long term care insurance coverage.
Long term care coverage is a type of insurance policy that generally reimburses you for the cost of home healthcare, assisted living or skilled nursing facilities. Unlike Medicare insurance that covers primarily skilled medical care, long term care insurance typically covers unskilled care that provides assistance with basic “activities of daily living.” There is a wide range of options for coverage, and you often have to go through medical underwriting. This means you want to have coverage in place before you actually need to use it so that you will qualify.
Make sure you do your research and know what you’re paying for when you choose a long term care policy. Carefully read you policy so you know how it operates, what is covered and what isn’t covered.
Scam artists are getting more stealthy and sophisticated with their ploys to get your money and steal your identity, especially when they pose as the IRS. Currently, these scam artists claiming to be IRS representatives are using intimidation as their weapon of choice, a tactic that is, unfortunately, often successful with the more vulnerable. We’re putting this article out not to scare you, but to arm you with information so you can be prepared if you receive one of these phone calls.
Please share this information with your loved ones, especially those you think might be more vulnerable to scam artists’ tactics. We at Wood Smith Advisors want your identity and your assets to remain safely in the right person’s hands – your own.
Wood Smith Advisors, a Registered Investment Advisor (RIA), is a fee-only financial services firm that partners with its clients to simplify their financial lives. We focus on women, entrepreneurs and individuals with complex financial situations, providing objective and competent advice, education and services to help them develop and build their businesses and reach their financial goals.
Like anything else in life, planning is key to being financially on track. It often is not a focus until a life event triggers a concern or wish, such as a marriage, divorce, birth, death or upcoming retirement. Here are some things to think about to help you identify the holes in your financial plan.
As you examine your financial plan, at the end of the day, you want to have enough money to cover all of your needs. If you’re coming up short, here are a few options you can keep in mind:
If there are gaps in your insurance coverage, you may need to address those to have a healthy financial picture. Getting more insurance coverage relies on the cost, coverage and underwriting.
Welcome to 2016! As I blog, snow is falling and will reach the “epic blizzard” proportion overnight. It brings to mind the topic of preparedness, and certainly fits with financial planning.
Just like having the right tools to weather any storm, being prepared for what may happen is 90% of what brings peace of mind.
Are you the type to prepare early, or do you wait to the last minute? Are you a “belt and suspenders” type of planner, or do you like to fly by the seat of your pants?
With the largest portion of our population reaching retirement age – PEW Research states approximately 10,000 people will turn age 65 each day until 2030 – this age group is starting to really pay attention to Social Security.
Baby boomers’ ages now range from 51 to 69. And research also suggests that they don’t “feel “old. So what does Social Security mean to them? What do they really know about it? And really, what does Retirement mean to you? I define retirement as having choices: working if you want, but not necessarily depending on that income. Rather, working for the fun of it, making a difference.
There have been strategies suggested over the years for married couples who can take advantage of spousal benefits, filing and suspending, etc., however these don’t work for everyone. In fact, the best use of these strategies was for spouses that were only a few years apart in age. The government has recently closed these “unintended loopholes” effective 2016 for anyone who is age 62 or younger.
One of life’s most devastating events is the loss of a spouse. Understanding what you should do if you are found in that situation can make a lot of difference as you cope and move forward in your life.
Many couples delegate their roles in marriage, such as who manages the bill paying, housework, shopping, cleaning, repairs, gardening, and such. But what happens when one half of that team is no longer there to help?
According to the US Department of Health and Human Services, over 80% of widowed people over age 85 in the United States are women. 35% of the women aged over 65 are widows, and 46% of women aged 75+ are living alone. Sadly, in the United States, over 48% of the poor elderly are widows.
I see many articles talking about how to choose the right professional to work with when it comes to financial matters. Let's face it, this is a very delicate area; one where you will need to feel very comfortable sharing personal information. And how about finding a financial advisor you can trust? You should be able to feel that you can trust the person that you're dealing with to provide you with the best information available according to your needs.
So how do you find this person, and what should you do to make sure he or she is the right advisor to help you reach your financial goals?
First, let's talk about common terms associated with financial advisors. To start with, how do they charge for their services?
As my inaugural blog post, I am going to introduce myself through a passion that I share with not only many of my clients, but a good percentage of the general population: Golf.
I have been playing the game for more years than I care to admit, having started as a twenty-something, taking time off to raise kids and playing “vacation golf”, to resuming my passion with fervor in the last fifteen years. People who know me know I am a golf nut. And there are many parallels between golf and my just as enthusiastically chosen profession: Financial Advisor and Wealth Counselor. Let me explain.
Golf is a game of character and honesty. You can admit your mistakes, learn from them, and move on. It's really a game for an individual, although teams also play together. But it's you versus "the course." The tools are important also. You will play better and enjoy the experience more with clubs that are fitted to you and your game. Playing with borrowed clubs will create inconsistent results. This relates well to finance and investing. It’s about you, not an average, not your neighbor’s situation.