Read on to learn about the potential financial impacts of dementia care — and strategies to help families prepare.
In a series of articles on the financial costs of dementia, Being Patient reporter Nicholas Chan explored the red flags of financial mismanagement among people with dementia, and how aging-related brain changes affect how we manage money. In this article, he explores the potential financial impacts of dementia care and strategies to help families prepare.
After Robyn Wendt’s husband was diagnosed with Alzheimer’s, the couple stepped away from managing their bed and breakfast in New Jersey full-time. Other employees filled in the gaps, and Wendt did what she could to help them run the business. Eventually, Wendt put her and her husband’s home on the market, moving to a more affordable area as she became the primary caregiver.
“I had to sell the house. We’d only been there four years,” Wendt told Being Patient in an interview. “We thought that was going to be our forever home.”
Wendt is among many family caregivers who must shoulder the financial burdens of dementia, forgoing career commitments to care for a loved one. However, financial advisors say that people rarely consider the potential costs in their wealth plan — and families often underestimate the costs of care which, according to a report by RBC Wealth Management-U.S. and Aon, can exceed $750,000.
Direct costs include spending on groceries and other everyday needs, medication and utilities, while indirect costs involve change of employment like shifting from full-time to part-time, taking career pauses, early retirement or leave of absence.
“These caregivers reported that there was a financial burden to them both directly and indirectly,” Angie O’Leary, an author of the report and head of wealth planning at Royal Bank of Canada Wealth Management-U.S., told Being Patient of the report. “Fifty-four percent of caregivers surveyed had made changes to their work arrangement to accommodate caregiving responsibilities. Most of that falls on the shoulders of women.”
According to the report, women devoted an average of 86 hours a month caregiving, while men on average spent 75 hours per month — not so different from a part-time job.
While professionals like financial advisors and daily money managers could offer guidance and support, not every family has the resources for these services. Often enough, this falls to family members relying on each other throughout the journey. Here is some advice from experts about how to navigate the financial burdens of a dementia diagnosis.
Planning ahead for the cost of dementia care
According to Kim Natovitz, an associate with Tribridge Partners, financial planning is especially important for individuals with a family history of dementia, which increases people’s risk of developing the illness. She said considering long-term care insurance is critical as people would no longer be able to apply for it after a dementia diagnosis.
“We all have to think about planning for long-term care as part of our overall financial plan,” Natovitz told Being Patient in an interview. “For many people, it is the missing piece. We’re mandated to have car insurance. If we have a mortgage, we have homeowners’ insurance. Then, most of us will obtain our health insurance either through an employer or through an exchange. But long-term care planning is something that most of us have to tackle on our own. If you have a family member who has had Alzheimer’s or dementia, it’s especially important for you to begin your planning sooner rather than later.”
For individuals living with dementia and their loved ones, Debra Levy Associates’ Aging Life Care Manager Bree Baldwin said creating a roadmap is crucial to navigating the challenges of life after a diagnosis. People should devise a care plan early in a diagnosis, ensuring that their financial and legal matters, among other affairs, are squared away.
Baldwin noted that consulting with an aging life care manager can be a good starting point. A care manager will assess clients’ needs, advise families on their options, help create support networks and refer them to financial, legal and care services.
Elder law and estate planning attorney Mary Jo Broussard Speier echoed Baldwin’s advice, urging families and individuals with dementia to create or update their estate plan, which generally includes their will and powers of attorneys, early on when they may still have the legal capacity to do so.
For guidance on financial and legal planning, the Alzheimer’s Association provides pointers on a host of issues.
Individuals seeking legal assistance could find an elder law attorney in their area of residence through the National Academy of Elder Law Attorneys.