Japan’s aging crisis shows how dementia poses a risk to household wealth. The US is not immune with older adults holding roughly $6 trillion in assets

This troubling trend serves as a warning for other aging countries, including the United States, where older adults with cognitive decline are estimated to control roughly $6 trillion in assets (2).

Demographic parallels

In 2023, nearly one-third of Japan’s population was over 65 and more than one in 10 was older than 80 (3). The Alzheimer's Association, meanwhile, estimates that 4.6 million people in the country have dementia (4).

The demographic situation is less severe in the U.S, but it is moving in a similar direction.

Roughly 18% of the U.S. population is now over 65, about 4% higher than in 2014, and that share is expected to rise substantially in the coming decades (5, 6, 7).

Dementia trends are even more concerning. In 2024, an estimated 6.9 million Americans age 65 and older were living with the disease, and that number is projected to double by 2060 as the population ages (8).

As in Japan, older adults play a major role in the U.S. economy. In 2018, AARP found that Americans 50 and older contributed about $8.3 trillion annually, representing roughly 40% of the U.S. gross domestic product (9).

The risks

Dementia poses a growing risk to economies, with implications for public finances, labor markets, household wealth, capital markets and consumer spending.

The most obvious issue is the financial strain it puts on families and public spending. Dementia often requires years of expensive care, increasing pressure on already stretched Medicare and Medicaid programs and forcing many families to exhaust their savings.

The potential ripple effects include weaker intergenerational wealth transfers, rising poverty, less discretionary spending and higher taxes to fund public systems. As retirement accounts and other investments are drawn down to cover care costs, capital markets could also face increased volatility, making it more difficult for companies to raise money. All of this weighs on economic growth.

Equally concerning is the risk that the wealthiest portion of the population becomes less capable of managing their finances. A Japanese study cited by Bloomberg found that people over 60 showing signs of cognitive decline hold roughly 40% less financial wealth on average than their cognitively healthy peers. One economics professor attributed the gap to wasteful spending and poor asset management (2)(10).

Fraud is another major concern. According to the Federal Trade Commission, the number of older Americans who reported losing more than $100,000 to fraud increased more than fivefold between 2020 and 2024 (11). As the population ages and cognitive decline becomes more common, this problem is likely to intensify.

What American families can do to prevent similar outcomes

The first step to prevent dementia from whittling away years of wealth building is awareness. The condition is common among older adults, and families should learn to recognize early warning signs. Common red flags include forgetfulness, difficulty communicating or holding a conversation, missed payments and impulsive spending (12).

Planning is critical. The National Institute on Aging (NIA) recommends monitoring finances early, helping individuals budget, setting up automated bill payments, registering phone numbers with the National Do Not Call Registry and enrolling in fraud alerts through banks, credit card companies or credit bureaus (13).