The construct of financial capacity in older adults

In the United States, older adults hold approximately 34% of the nation's wealth. The combination of wealth, cognitive decline, and impaired financial capacity is a growing challenge to our society. As America ages, one of the most pressing challenges facing older adults is living an independent and autonomous life. Financial capacity (FC) is one of the instrumental activities of daily living considered the single best predictor of capacity for independent living in older adults. FC issues arise when an older adult experiences cognitive loss or dementia. Therefore, the purposes of this article are to: (a) review the construct of FC focusing on older adults, (b) discuss the different models of FC, (c) describe ways to assess FC in older adults, (d) identify indicators of FC impairment in older adults, and (e) discuss implications for practice.