Cognitive decline and financial loss: What you need to know.

As people age, changes in memory, reasoning and judgment can creep in slowly — and often, money is where the first signs emerge. According to a study from the National Institute on Aging opens in a new window, financial challenges such as missed credit card or mortgage payments can indicate the early stages of dementia well before a diagnosis. For adults over 50 and their loved ones, these financial missteps opens in a new window may be one of the earliest red flags of cognitive decline.

According to the World Health Organization opens in a new window, there were 55 million people globally living with dementia in 2023, and it’s estimated the number could nearly triple by 2050. Recognizing the patterns of cognitive decline early is critical to protecting financial wellbeing. It’s important to understand how cognitive decline affects money management, why seniors become more vulnerable to financial loss and what you can do to help ensure long-term stability.

Recognizing the signs

Managing finances requires a complex set of mental skills — planning, memory, attention to detail and decision-making. A missed bill here, an odd purchase there, or a growing confusion around banking tasks — these are not just signs of distraction, but possible indicators of deeper cognitive challenges. Even routine tasks like paying off a credit card or tracking monthly expenses can feel overwhelming. Many older adults who were once diligent about their budgets may start to overlook bills, make duplicate purchases or forget how to navigate their online banking accounts.

Sometimes the changes are subtle at first. Your loved one might forget to pay a bill or struggle to recall recent transactions. Over time, though, the mistakes may become more frequent or costly, which can lead to overdraft fees, lapsed insurance coverage or unnecessary late penalties. You may start to notice that something is wrong when a loved one starts asking repetitive financial questions, expresses anxiety about money they used to manage confidently, or falls for a suspicious offer they previously would have ignored.

For many adult children or spouses, these early signs opens in a new window of cognitive decline show up not through dramatic medical episodes but through quiet shifts in behavior: unopened mail, a stack of unpaid bills or confusion over whether a purchase was already made. That’s why financial mismanagement can serve as such a valuable — if distressing — early warning signal. It’s also why family members and caregivers play a vital role in observing changes and gently intervening when necessary.

Financial vulnerabilities that come with cognitive decline

With declining cognitive ability, financial vulnerabilities tend to increase opens in a new window. Your loved one may become overwhelmed by tasks they once completed with ease, or they may more susceptible to manipulation or poor judgment. While scams often get the spotlight—and rightly so—it’s not just strangers that pose a risk. Financial abuse can come from acquaintances, caregivers or even sometimes family members, especially if they’re finding it increasingly difficult to track where money is going.

Cognitive decline reduces not just memory, but the ability to reason through unfamiliar situations or spot red flags. That’s one reason why older adults can fall victim to charity scams, fake prize claims or manipulative “friendship” schemes that result in repeated requests for money. And because short-term memory is often one of the first faculties to be affected, they may not remember having sent money before — making them easy targets for repeat fraud.

But exploitation isn’t the only concern. Poor judgment and impulsivity can lead to uncharacteristic spending or risky financial decisions. A retiree who always stuck to a budget might suddenly make large purchases, give away assets or invest in questionable opportunities. Others may become increasingly paranoid or confused about where their money is, leading to hasty withdrawals or duplication of payments.

Families need to be especially vigilant during this time. If an aging loved one starts expressing worry about not having enough money — despite having sufficient resources — or complains that people are taking advantage of them, it may be time to dig deeper. Similarly, be wary of new “friends” offering to help manage finances, as it’s all too common for people with ulterior motives to take advantage of those in more vulnerable positions.

Strategies for protecting financial wellbeing.

The key to protecting your loved one or your own financial wellbeing is to begin the conversation or planning early — ideally before there are signs of cognitive decline. Planning ahead empowers them to remain in control while building in safeguards for the future.

One of the simplest, yet most effective ways to help is to automate routine financial tasks. Automatic bill pay, direct deposit and account alerts can significantly reduce the mental load of managing finances — and provide early warning if something unusual occurs. Equally important is consolidating financial accounts and organizing records so that they’re easy to access and understand.

Open communication is essential — and so is starting early. Talking about finances can feel uncomfortable at first, but it’s far better to have a proactive discussion than to respond after a problem has already occurred. Families can help by offering support rather than judgment: Frame conversations around care and shared responsibility rather than control.

Creating a financial roadmap that includes aging-related considerations can go a long way toward preventing confusion and instability. This might include identifying a trusted contact who can be alerted if financial activity becomes erratic, documenting where key financial information is kept and making a list of essential expenses that should never be interrupted.

It’s also worth noting that laying the groundwork of legal protections such as financial power of attorney early makes those transitions much smoother. With the help of a financial advisor or family member who understands the intersection of aging and money, you can help your loved one develop a tailored plan that respects their independence while building a safety net for their future.

When money starts sending signals, it’s time to take action.

Money often tells the story before words do. When cognitive decline begins to affect financial decisions, the signs are usually there — but only if we know to look. A forgotten bill, an odd purchase or increasing confusion about money may seem small at first. But they are important clues that something deeper may be happening.

If you’re noticing changes in a loved one or yourself, it’s not too early to act. Start by having a conversation. Reach out to a trusted advisor. Put the right plans in place. With the right support and foresight, aging doesn’t have to mean financial vulnerability. It can mean peace of mind.