Alzheimer's Awareness Promotes Proactive Family Finances
Updated on Feb 04 2019
There are currently 15 million Americans providing unpaid care to a person living with Alzheimer’s or a related form of dementia. Learn why families who anticipate or are aware of the possibility of cognitive decline in their family are more likely to prepare for their financial futures.
With no treatment or cure on the horizon and a growing aging population, the Alzheimer’s and dementia epidemic is expected to triple by 2050, from 5.5. million to an estimated 16 million people living with the disease. Aside from the devastating emotional and physical toll the disease takes on families, it also brings a severe financial burden.
Learn more about the financial burden carried by families coping with dementia and why one study believes those families may be better equipped for retirement.
The Financial Impact of Alzheimer’s Disease on Families
Caring for a loved one with Alzheimer’s costs an average of $56,290 annually with costs growing as full-time care becomes a necessity as the disease progresses. The reality is that most Americans are not prepared for emergencies and healthcare expenses, so after hearing personal stories of financial hardship from dementia caregivers the Alzheimer’s Association decided to conduct a survey to examine the impact of Alzheimer’s disease on family finances. The Alzheimer’s Association surveyed more than 3,500 Americans who were contributing to the care of someone with dementia.
Beth Kallmyer, vice president of constituent services for the organization, says, “What we found was really startling. The cost of paying for care was putting people in a situation where they had to make really difficult choices around basic necessities — things like food, medical care, transportation.”
The report also revealed that:
- on average, caregivers spent more than $5,000 annually of their own money on the expenses (i.e. food, adult diapers) of a loved one with dementia.
- more than one-third of respondents who had jobs had to reduce their hours or quit their jobs to fulfill their caregiving duties.
- thirteen percent had to raise money by selling personal belongings (such as their car) to make ends meet.
- nearly 50 percent of those surveyed said they had to dip into savings or their retirement funds.
The Link Between Family Health History and Retirement Planning
There’s no question that Alzheimer’s and dementia can bring a great financial burden to families coping with the illness. However, a recent study from the University of Utah found that people who have a family history of the disease are more likely to seek professional financial advice and even delay retirement than those who have no family history of the disease.
The study was sponsored by the National Institute on Aging and published in the American Journal of Alzheimer’s Disease and Other Dementias.
Because of the degenerative nature of the disease, costs increase as the disease progresses. The study found that families that have seen the uncertainty of medical costs tend to better prepare for a worst-case scenario.
The study found that:
- families with a family history of Alzheimer’s disease were 85 percent more likely to ask financial advice from a professional than those without a family history of the disease.
- individuals with a family history of Alzheimer’s were 40 percent more likely to delay retirement than a person without a family history of the disease.
The study authors believe that the link between family health history and retirement planning will only intensify as we uncover more about the effects of health on finances.
Prepare for a Better Financial Future
Meeting with a fiduciary financial advisor can help you plan for your financial future. A fiduciary is legally and ethically obligated to put your interests ahead of their own and can help you take an honest look at your finances to create a retirement plan that can help you cope with an uncertain future.
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