A sudden financial shock in midlife, such as losing your job or most of your savings, can increase your risk of dementia.
The stress of losing a large amount of money appears to accelerate cognitive decline, at least in people between the ages of 50 and 65.
A study of 8,000 people looked at those who lost at least 75 percent of their total wealth in two years.
Compared to people whose financial situation remained stable, those who experienced a financial shock were 27 percent more likely to develop dementia.
The stress of losing a large amount of money appears to accelerate cognitive decline, at least in people between the ages of 50 and 65
The study followed people over the age of 50 in the US for an average of fourteen years to see if they developed dementia.
A diagnosis was based on a telephone assessment with a medical expert and how they performed on tests of thinking skills.
These tests also showed that people's cognitive decline accelerated when they lost a large amount of money.
But the link between a sudden financial shock and cognitive decline and dementia was only seen in people up to age 65 and not in those who were older.
The authors of the study, led by Zhejiang University School of Medicine in China, suggest that people over the age of 65 are better able to cope with stressful life events.
Dr. Jing Guo, lead author of the study from Zhejiang University School of Medicine in China, said the stress of a sudden financial shock can affect health, but added: 'A negative wealth shock is defined as a sudden loss of wealth caused through rapid depletion of assets and accumulation of new debts, implying reduced consumption of health-promoting goods and services.
'After experiencing a negative wealth shock, people may have to abandon healthy eating habits due to limited wealth, exercise less due to depressive emotions, and engage in fewer social activities due to limited recreational time.
'All the above elements are preventive in dementia.'
Previous research has shown that a sudden financial disaster raises people's blood pressure and increases inflammation in the body, which can damage the brain and accelerate memory loss later in life.
Losing money also increases the risk of depression, which is linked to dementia.
The study, published in the journal JAMA Network Open, involved 2,185 people who had experienced such a financial shock.
This meant they lost at least three-quarters of their personal wealth, taking into account savings, stocks, assets such as homes and businesses, as well as debts such as loans and credit card debt.
The people who had suffered a financial shock were compared with people whose finances had started on a positive note and remained largely stable.
Those affected by a financial change showed a faster decline when they were regularly tested on their thinking skills, including delayed recall of a list of items, counting backwards and mental arithmetic.
They were also more likely to develop dementia, which was assessed by the tests and a detailed telephone survey where a medical expert assessed people's cognitive decline and asked about problems with daily activities such as shopping, cooking and taking medicine .
When researchers looked at over-50s in separate age groups, they found that the link between a financial shock and dementia was only seen in people under 65 – whose risk of dementia was 38 percent higher after an economic crisis.
This may be because older people tend to have more positive and fewer negative emotions, which helps them cope better with life changes.
But the finding may not be accurate because the study included a relatively small number of people over 65, which may have skewed the results.
The study looked at data from people involved in previous research who underwent repeated cognitive testing.
This test data showed a faster decline in people who had had a financial shock, but only in people under 65.
People who started out with no financial assets or debt were also 61 percent more likely to develop dementia than people whose finances remained positive and stable, the study found.
The link between sudden financial problems and dementia was seen even after taking into account other factors such as age, illness and exercise level.