Living in a 55+ community, I have heard about some elderly residents who have issues regarding unpaid bills, delayed payments, losing money in scams, and investing in high risk stocks. These residents were financially very savvy a few years ago and now they have difficulty keeping up. In some cases, their children have started handling their finances.
An article ( ” Dollars and Dementia – An early warning system” in AARP Bulletin, December 2025 issue) points out this could be an early warning sign that their cognitive abilities are declining. A study, cited in this article, found that 7.4 million older adults with dementia or cognitive impairment were managing their household finances on their own.
Giving up financial control is a very hard thing to do. It is a highly emotional decision. I have seen children taking away car keys when parents cannot drive safely. This may be a lot easier than handing over financial control.
This
study found that nearly 84% of survey respondents would not want to give up financial control at the onset of cognitive decline, preferring to wait for a moment before they would completely lose the ability to manage their own money.
What has been your experience dealing with such a situation? If you are a retiree, how will you prepare in advance so the transition is smooth, when the time comes?
I am 78, all in Trust or IRA’s with beneficiaries. One of my children will be an executor to handle our finances, when we pass for the 3 children. We have a line of succession for Power of Attorney for Health and for Property. However, as we grow older I plan to give them more and more insight into all our finances, and have prepared documents with detailing the banks, Vanguard, Fidelity and the like. I think easing into it is the way to go. I hope to manage my finances until sometime in my 90’s. I have done my Fed taxes since I was 16, and still do, but now get help from Turbo Tax. At 16, it was one page, now it is like 50, deepening how you count all the schedules.
I’m 75 and never married. My only close relatives are my 78-year-old brother and my 65-year-old sister. None of us have any children. My brother is in assisted living, I handle his relatively simple finances. My sister and I both have more savings than we will ever likely spend.
I have tried to simplify my finances. My investments are all at Vanguard, mostly in a traditional and a Roth IRA. I do most of my banking with Capital One, which has excellent online features to manage my accounts. I plan to close a long-dormant credit union account in the next few days.
In my will, I’m leaving my home and any vehicle to a non-profit. My IRAs will also mostly go to non-profits as beneficiaries.
When I’m no longer capable of managing my own financial affairs, I plan to use Vanguard’s financial advisory service for my IRAs. A local non-profit set up to protect the elderly will handle the rest of my finances and pay my bills for a fee.
I accept that I will probably stop driving entirely in a few years. I expect to move to a senior facility of some sort around then. Most likely, I’ll donate my home to the non-profit at that time.
The big question in my mind is how to decide when to turn my finances over to others. That will certainly be much harder for me than the decision to stop driving.
Looks like you have thought through a lot of things already and organized well. Question of when you should hand over control of finances is a big one. Someone close to you, who sees you often, can figure out if you are slipping and that could be the trigger. Others on this board may have better suggestions.
Sundar, I appreciate very much that you have brought up this topic again, I tried to ask about it when the forums first opened, but received few responses. We are in this situation now with our elderly parents and I appreciated all of the responses given. It is a difficult time. Chris
Bogleheads Conference 2024 featured Dr. Carolyn McClanahan, MD and CFP, addressing the topic When Should a DIY Investor Quit DIYing? I found her analysis and plan very helpful.
Thanks very much for this suggestion. The idea of creating an “aging plan” makes a lot of sense.
Great video and insight. This should be required for every DIY investor or family member of such a person.Thanks for sharing.
Watched the video. Excellent presentation. She says, start getting help when 1. Finances are complicated 2. Someone is counting on you 3. You are starting to slip.
Start this process early and have several involved.
“You Are Slipping” (normal aging, mild cognitive impairment, dementia) starts at 31:30.
Both my parents died with dementia. I was actively involved with my dad’s life and finances until he died at age 90. As an older single mother I want to minimize as many “caretaking” issues as possible for my 2 daughters, especially after watching my mom’s decline and helping my dad. That is what guides me as I make my decisions nowadays, whether financial, record keeping, or buying a house that is single level. As a former librarian I believe the research about our decline in our decision making ability as we age. So in my world sooner is better than later. I want to be in control of how my life plays out but that doesn’t mean I have to do it alone! I have always been the financial one in my marriage and assisting my daughters but after both my ex-husband and dad died within a month of each other and we all inherited money it was time to retire from playing financial advisor. I realized as I advised my girls on selecting an advisor that I was ready for one too! So at age 69 I hired someone and have been relieved and happy with that decision. It gives me another adult to bounce a variety of life decisions off of, which is as powerful as the actual portfolio management advice she provides.
One may be competent for all this at age 98, another not competent anymore even at age 70. The issue becomes: if one is becoming irrational in dealing with finances and/or any other aspects of life, that person will not know it, by definition. Thus the extreme difficulty for that person to give up control. And, by that person’s reckoning, it seems it is the others that are irrational.
For decades I spent much time hiking and backpacking in remote areas, always alone. One thing that I learned is that if I was too cold, or too tired, or too hungry, or too afraid, I might start making bad decisions on how to survive, i.e., I could become irrational in my decision making. But in the moment, alone, I would of course think I was being rational. People who are dying of hypothermia in the wild have been known to strip off all their clothes because they are “too warm” – seems like a good decision to them. So, anyone who is “losing their mind” (and I don’t mean that in a pejorative or trying-to-be-funny way) will likely not know it.
A year ago my parents (90+) were living mostly independently in a CCRC, with one of them still driving. Now they are both in nursing care in that CCRC. It has been a tough year, but certainly enlightening. Similar to Hemingway’s description of how bankruptcy happens, it was “gradually, then suddenly”. They were doing fine, until little things, like discarding some tax documents, getting confused on which day it was in terms of medical appointments, and other little things started becoming more obvious the family.
And, to be perfectly honest, no one in the family wanted to be “right” on their suspicions of the decline: no one wants to enter that stage of life, and no one who loves them wants to see it happen either, so, perhaps everyone involved is looking through the proverbial rose-colored glasses. But, it becomes difficult to deny reality forever, so here we are (although I see that some can go on in denial for a very, very long time).
It was the director of the CCRC that got us together (without our parents) for a “come to Jesus moment”. I realized that this person has no doubt seen this before, and, sees it regularly. While the transition was probably as smooth as it could be, that does not mean it was smooth – there was still a lot of denial, particularly for one of my parents. Mr. Quinn hit it spot on – it’s all about dignity.
The people who have commented on the original post who have parents who realized they needed help and, more importantly, were willing to relinquish control – you are certainly fortunate as I think that is perhaps the major battle here.
I don’t have any real answers. I am not sure there is any single best way of handling all this, even for any specific person in this situation. Lucky are the few who make it through without a lot of heartache and tears.
The analogy is kind of like how many want to die (and, often how we plan): to be perfectly physically and mentally healthy up to some advanced age, then go to bed one night, and, the next morning, wake up dead. It does happen, but only to a very lucky few.
This is a great question, and there is no easy answer. I’ve been deeply involved in helping my parents, in-laws, and my wife’s widowed (and childless) aunt. Some were out of necessity. In my mother-in-law’s case she willingly handed over control in her early 80s.
The hardest was my wife’s aunt. She had substantial financial resources, but they were scattered in many accounts, some of which she lost track of. Her dementia came on quickly. Luckily she trusted her sister and willingly gave us POA and I spent 2 years getting her affairs organized.
Our plan is to have everything as organized, documented, and simple as we can. Our 2 sons are more than capable of handling our finances, but I hope to keep doing it for as long as I’m able. As others have said, the trick is knowing when to hand over the keys. I see it as a delicate balance between maintaining your independence, and being too stubborn. I’ve seen too many examples of people who denied the reality, and left a large mess for their children to handle.
I’ve been thinking that the next step may to be speak with our children and let them know that we feel comfortable managing our affairs, but that we also trust them enough to want them to step in if they see signs of decline that concern them. Hopefully not for some time.
An equally important question for some people is who will take over. I am single and have no biological children. My executor is my ex-step-daughter, but she lives on the other side of the country. My sisters live in England. I probably need to find a reputable firm of some kind in my area, but am reluctant to pay for assistance before I need it. Suggestions welcome.
I hear you Kathy, but when we’re talking about cognitive decline, we may not know when we need it until long after we do, if then. I don’t really want to pay for help before it’s needed either, but probably will.
Think of paying for help early as an insurance policy. Your heirs will receive the benefit of your investment.
That’s a good way to think about it Harold. And if we both get to our late 90s fully compos mentis, it will just be another welcome example of insurance we have and are glad we never needed.
Kathy, I work with an FA locally and my understanding is that his company also handles trusts. Of course, there are fees to be paid. If you wish to communicate, ask Jonathan for my email address.
Thanks Jeff, have done.
My wife, being the most financially savvy person I know, took over her parent’s finances. With unanimous agreement from all her siblings too.
She says that was easy compared to getting her Dad to give up driving.
In the last few years of his life, I doubt my Dad would not have fallen prey to a scam. He was so terribly suspicious of anyone wanting money that I think he would have bailed before it came to fruition. In his late 80’s and early 90’s he became a miser, under-tipping and spending as little as possible on groceries. He had more money than me at the time, but he always wanted me to pay when we went out to eat. He was generous to my siblings and me with checks at Christmas, but that’s about the only time he opened his wallet. I wrote about settling my parents’ estates here.
I’ve previously shared here the steps I’ve taken so that either of my kids living in the US could take over at any time. That being said, I think there’s a great benefit mentally to staying in charge of your finances as long as possible. I have recently observed some cognitive decline in a relative a few years older than me. Her husband was completely in charge of their finances until his sudden demise four years ago, when they were both in their early 70’s. From that time, their daughter took over all the bill-paying for her mother. I find myself wondering if it might not have been better for the spouse left behind if she had been assisted to learn to handle her own affairs, rather than becoming 100% dependent upon her daughter. I treasure my independence but I’m grateful that I have helpers waiting in the wings. My family has many people who have never had children. Those individuals have had nieces or nephews help them when the time came. I was proud and touched several years ago when one of my married but childless cousins (himself an only child) asked my son to be his backup Health Care Proxy and Executor if his wife were to predecease him.
It is important to make sure the spouse is trained to handle at least some finances so any slippages can be noticed and corrected.
I do see several in our community depending on their children to pay the bills and manage their finances.
Good topic. We have POAs prepared for when the time comes. I just hope I recognize when that is. My kids are generally aware of our finances, and I’ve prepared written instructions for both them and my wife. I’m also fortunate that one son-in-law is an estate attorney, and the other a fiduciary advisor. The kids already helped their mom before her death, and help the in-laws, so I have no concerns about their ability and willingness to jump in.
My dad was the national financial secretary for his union, and also the guy that helped many of his elderly neighbors with their insurance and financial challenges. But in his mid-80s he began having trouble balancing his checkbook; that’s when he involved me. He appreciated my taking over, which made the transition very comfortable….. Persuading him to give up the car keys was a totally different experience.
Being age 81 and still in charge – contrary to what some HD readers may think🤓, it’s not just about giving up financial control. I see it as admitting loss of all control, of surrendering and who wants to do that admitting the end is getting closer. It’s about dignity.
Of course, there is logic to dealing with cognitive decline as you suggest, but facing it is not easy. Admitting it close to impossible.
Dick, I think you hit on an important aspect of this. Suffering cognitive decline, especially a severe version, is all about losing dignity. It’s not just control of your finances, but also basic daily functions and activities. Organizing your affairs, and gracefully transitioning them to a trusted person, maybe over a period of time, seems to me to be a dignified approach.
Remarkably my mother in law was still managing her finances at 102 1/2 yo when she moved in with us this past May from an independent senior housing apartment she shared with her second husband who was 98 at the time. She only has Social Security for income so admittedly her finances are not complicated, but still…
Since she moved in with us she has asked my wife to assist, but not because she is unable to keep track of her finances, but more because of disinterest I believe.
I am age 80 and still handling all of our finances. My wife has limited financial knowledge and interest. Both of our children have DPOA for us but we have not yet had them setup to access our accounts.
One caution is to make sure they are approved by financial institutions to access your accounts. Fidelity told me that if anyone other than my wife and I have access to our accounts without their approval, it would void their warranty to restore our funds in the event of a hack.
I seriously considered having a company that I know and trust to handle our finances and taxes. That would have cost us $16k a year at $.008 of AUM which they charge. I am reluctant to do that as long as I am able. Our investments are not complicated and consist of index etfs, CDs, treasuries and TIPS, but would be too much for my wife and possibly my kids.
I have considered giving a portion of our investments to the investment company, which would reduce the cost, and make it easier for them to take over the entire account when I die. But I have not pulled the trigger on that yet.
Good information about Fidelity’s restrictions. Due to increasing scams, it is not a surprise. Let us know how the investment company option works out. It will be of interest to many.
Jerry, could you explain what you mean by “giving a portion of our investments to the investment company”? Apologies if I’m being dense.
Sure. I have 3 accounts: traditional IRA, brokerage (taxable) and a Roth IRA. For example, I could let them manage my Roth. This would reduce my AUM fees to about $8k.
This would put them in a good position to transition to manage everything when I die. Also, my wife would get to know them. Whoever manages our assets will need to meet in person with her. She would not do online or phone only.
I know they would be agreeable to this. For their fee, they would also do our taxes (by a CPA) and also do financial planning by a CFP.
Jerry, I arrived at a similar arrangement with my investment advisor. His AUM was only a small portion of my total assets…about $8K/year. I am 67 and we have been in this arrangement for 10 years. My wife and kids know him. He understands what we are up to and what the issues are our in our financial life. He is prepared to step in when needed and I speak with him several times a year to validate major financial decisions. This is insurance for the eventuality of me handing off the work to the investment advisor. The fee will probably go up as they take on more, but that is OK.
Sadly, the loss of insight is one of the earliest signs of dementia that I’ve seen in the elderly in my working life and now in my personal life. Scams are becoming so sophisticated that even a person who is cognitively intact can fall prey to. I plan to involve my daughter in our financial life after the holidays. The expectation is that she will monitor our accounts as I continue to make the financial decisions for my husband and myself. Ideally, I envision a smooth transition to allowing her to make decisions for us when the time comes. But, we all know it’s not a perfect world.
It’s very hard to admit you are slipping. I was helping my dad the last few years of his life and had to reset his online password for him 20 times in a row, and he still refused to admit that he might be the problem, not the bank. Fortunately, we got his will revised to his liking and TODs set up correctly on all his accounts before he really started slipping…and becoming more resistant to accepting help.
Not sure of the details, but I think I’m going to start involving my kids sooner rather than later and plan on stepping out of actively managing my investments by age 70 or so, even if it involved AUM or other fees.
It is near impossible to self diagnose if slippage starts to happen. Tendency is to shrug it off. Someone close can point this out, but many live alone.
That seems a little young. I’m 77 and still doing OK. Nothing against involving your kids early, but unless you suspect early onset dementia no reason to think you are going to start slipping at 70.
Yeah, maybe a little aggressive on the outsourcing age. Other considerations there are a belief that scammers and hackers are only going to get better at scamming individuals (even individuals whose profession was preventing hacks), wanting to be too early than too late in recognizing myself as the problem (or, as my dad, denying it), and the reality that my wife is not as interested in keeping the financial plates spinning.