Unpaid bills, overdrawn accounts, dwindling investments: When seniors begin experiencing fiscal troubles, early dementia or Alzheimer’s disease could be an underlying cause, researchers say.

In the early stages of the disease, people with undiagnosed Alzheimer’s are at high risk of making foolish and dangerous decisions about their finances, mostly because families may not know they need help, researchers say.

“Individuals often aren’t diagnosed early enough, and it’s a perfect storm,” said study author Carole Gresenz, a professor of health systems administration at Georgetown University in Washington, D.C.

“They’re vulnerable to large reductions in liquid assets because they’re not making wise decisions about their finances, savings and checking accounts. This can also reduce net wealth,” added Gresenz.

Ruth Drew, director of information and support services for the Alzheimer’s Association, pointed out that Alzheimer’s destroys the brain.

“As the disease progresses, everyone with Alzheimer’s will reach a point where they need help with their finances and ultimately assistance with daily tasks and around-the-clock care. We have certainly spoken to people whose finances were significantly affected,” she said.

In some cases, people responsible for making major financial decisions, either at work or at home, were unaware of their own mental decline, added Drew, who wasn’t involved with the study.

“Others around them either did not notice or did not feel they could alert the family until there was already significant financial impact,” she said. “By the time we met them, family members were facing the challenges of caring for a person with far fewer financial resources than expected.”

The new study linked Medicare fee-for-service claims data and the national Health and Retirement Study of Americans over the age of 50 for the years 1992 to 2014. The health and retirement study included questions about households’ financial assets and liabilities.

The sample included nearly 8,900 U.S. households, of which nearly 2,800 included someone with Alzheimer’s or related dementia. In these households, the financial “head of the household” had the thinking disorder in 73% of them.

Gresenz said declining financial skills associated with Alzheimer’s may mean unpaid bills, overspending on credit cards or paying too little attention to investments and other forms of wealth. Impaired money sense also makes the elderly more vulnerable to fraud and scams.

The bottom line: “Living in a house with early-stage AD puts both the patient and family members at heightened risk of a large reduction in liquid assets — money that’s easily accessible, like checking, savings, money markets, bonds and stocks,” Gresenz explained. “One reason this is so concerning is that these core financial outcomes are occurring just prior to a time when they will have substantial costs placed on them.”

Alzheimer’s costs $341,000 on average from diagnosis to death, the Alzheimer’s Association says. Families pay 70% of this out of pocket.

Alzheimer’s disease affects 5.5 million people in the United States and 50 million worldwide, the researchers noted. As the U.S. population ages, prevalence of Alzheimer’s will rise, with a near tripling by 2050, they said.

Gresenz said families need to be involved as early as possible.

“It’s always a good idea to check in on loved ones and make sure that the vital financial activities of the household bills are happening, maybe checking credit scores. Even if there are not yet any obvious signs, making sure there’s a safety net,” she said.

“There’s also a role for financial institutions, which could play an important part in protecting elderly individuals,” Gresenz added.

Drew said that when it comes to Alzheimer’s and dementia, it’s never too early to put plans in place.

To older adults themselves, Drew said, “Talk to your financial planner early. When you’re setting up financial plans, put in provisions that say who the trusted people are in your life.” That way, if you start to show symptoms of mental decline, “your banker or financial planner will know who those trusted people are, and will have the paperwork that authorizes them to share their concerns.”

The study was published Oct. 25 in the journal Health Economics.

More information

Find out more about Alzheimer’s disease from the U.S. National Institute on Aging.

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