The aging process can hurt your ability to make proper decisions about your finances. On average, 29.2% of individuals aged 80 to 89 have cognitive impairment. While the aging process affects everyone differently, it is important to protect the investment portfolio you have spent years accumulating.
Cognitive impairment has a direct, negative impact on a person’s and couple’s finances, yet many do not want to talk about it. Last year, a State Street survey found that only 32% of investors have discussed planning for their possible cognitive decline with family members. More importantly, only 39% of investors have a suitable plan for if and when their decision-making skills diminish.
AAII Weekly Survey Question
To see where our readers stand in planning for their own possible cognitive decline, last week’s weekly survey asked:
What steps have you taken to transfer financial decision-making in the even of sognitive decline?
Here are the results:
In all, 2,626 responses were given (readers could select multiple responses).
I was very encouraged to see that only 11% of respondents said they have not taken any steps to transfer financial decision-making in the event of their cognitive impairment.
As far as the steps our readers have taken, most have organized their current records and documents. However, all of the possible action responses received roughly the same number of votes. Only 19% of the responses, though, indicated that readers have built an estate plan.
Weekly Special Question
To delve into this issue more deeply, our weekly special question asked the following:
What conversations have you had with your spouse, children and/or financial advisor(s)
regarding the possibility of your cognitive impairment?
In all, 111 readers responded to this question.
However, of these readers, roughly 27% have had no conversations or only limited conversations.
Nearly half of respondents–47%–said that they have had in-depth conversations with family members or financial advisors regarding their possible cognitive impairment. Another 23% say they have created legal directives in the event they experience cognitive impairment, including creating written instructions/will and assigning power of attorney.
Here is a sampling of the responses:
- “Where things are located and who my brokers and financial advisors are.”
- “Have documents signed and sealed to take care of that event.”
- “My wife and I have wills and our daughter has copies and understands our wishes.”
- “I am just starting to think of increasing my dialog with my family and trustees of the family trusts.”
- “Told financial advisor if they see screwy transactions, contact self and spouse to check on the rationale for transactions.”
- “Spouse doesn’t want to talk about it much.”
Everybody has an opinion! Why not give us yours? Participate in our weekly member poll, updated every Monday, and see the results online at http://www.aaii.com/memberquestion.