Wallet Study
Red Flags Connect Memory Loss with Money Loss
IOG Director Dr. Peter Lichtenberg is an expert on financial decision making in older adults. For more than a decade he has researched the connection between changes in financial decision making and vulnerability to financial exploitation. Despite his extensive experience in the area, recent research from the Health & Retirement Survey surprised him. With every 10% loss of memory in the 1,000s of older adults who took the H&R survey, came a 15% to 20% drop in overall wealth.
Dr. Lichtenberg's WALLET study was born. WALLET stands for Wealth Accumulations & Later-life Losses in Early cognitive Transitions. If he could isolate the critical changes in how people with early memory loss manage their money, they could become red flag warnings of possible money loss and exploitation in the future. Rather than simply asking people about how they manage their money, Dr. Lichtenberg devised a research protocol in which the person's checking account, credit card use and bill paying (such as rent, phone, taxes and utilities) provide most information needed. By analyzing participants' checking account and other statements and correlating them with interview results and cognitive testing, his team worked to isolate the early warning signs of money loss.
Results thus far have confirmed the connection between memory loss, deteriorations in money management and loss of money. The team interviewed 51 persons (of 150 planned) from across Michigan, with a mean age of 72. Seventy percent of them reported their memory isn't as good as it used to be or have a diagnosis of Mild Cognitive Impairment. Overall, loss of wealth across the whole group was associated at a rate of:
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- 20% with insufficient funds or penalty fees in their checking account
- 46% with an excessive expenditure in one category
- 10% with missing the payment of bills
- 28% with being asked by others to support them
- 20% with being the victim of financial exploitation.
In persons with Mild Cognitive Impairment, overall wealth loss rose to 56% from 26% and financial exploitation rose to 24% from 8%. These persons also scored at much higher risk on the Financial Exploitation Survey and Financial Decision Tracker tools to assess decision making. The WALLET study also found that nearly half of participants had anxiety and worry about finances and 10% reported they were repeatedly losing money without permission.
Cognitive decline and early dementia, coupled with declines in financial decision-making and financial mismanagement makes older adults vulnerable to financial exploitation. Being a victim of financial exploitation can then spiral the person toward further functional decline and early mortality. "Our study results deepen our understanding of financial decision-making and money management practices in early dementia," Dr. Lichtenberg said. "The red flags we outline could lead to targeted tools for financial, social, mental and physical health services providers, tools to identify persons most at risk before they are victimized."
The WALLET study is recruiting participants. If you are interested in taking part, please contact Vanessa Rorai, MSW, at 313-664-2604 for details. recruitment flyer (pdf)
What to expect if you participate in the study
1. Vanessa Rorai will ask you screening questions to determine if you are eligible to participate in the study.
2. If you are eligible, Vanessa will send you our consent form that describes in detail all aspects of the study for your review.
3. After you review the consent form and agree to participate, Vanessa will begin the process of obtaining 12-months of bank statements.
4. Once Vanessa receives the bank statements she will completely de-identify all bank records. She will then contact you to schedule two interviews. The interviews can be done via telephone or video call. Interviews are scheduled based on your availability and typically within a week of receiving the bank statements.
5. The first interview is with Vanessa, it will take approximately 45 minutes. She will ask questions about your physical and mental health, feelings of stress, and how you are organized financially.
6. The second interview is with Peter Lichtenberg, it will take approximately 1 hour. He will ask more in-depth questions about financial decision-making, financial management, and your cognitive health.
7. After the interviews are completed, Vanessa will send you a compensation form to sign. Once she receives the signed form we will mail you a check for $100 and your participation in the study is complete.The WALLET study was funded by the Retirement Research Foundation and the National Institute on Aging.
