Financial Prepartion Before Dementia

The Importance of Financial Preparation Before Dementia

Updated on Dec 20 2018


An estimated 5.7 million Americans currently have Alzheimer’s disease. It’s the sixth leading cause of death in the United States and 1 in 3 seniors dies with Alzheimer’s or a related form of dementia. There’s no question the disease causes mental and emotional devastation - but what about financial devastation? Learn more about the effect of dementia on finances and what you need to do today to prepare a future with the disease.

No one likes to think about a future with Alzheimer’s or a related form of dementia. There is no cure or treatment for the disease and the physical and emotional toll it takes on families is devastating. The reality is that Americans need to also consider the financial implications. The 2018 Alzheimer’s Disease Facts & Figures Report revealed these startling statistics.

Alzheimer’s and Dementia in America

  • There are an estimated 5.7 million Americans living with Alzheimer’s.
  • By 2050, there will be an estimated 14 million people with Alzheimer’s.
  • Every 65 seconds someone in the United States develops the disease.
  • Between the years of 2000 and 2015, deaths from Alzheimer’s increased 123 percent.
  • Alzheimer’s kills more people than breast cancer and prostate cancer combined.

There’s no question that the Alzheimer’s and dementia epidemic is growing and posing a real threat to our mental and physical well-being.

The Financial Impact of Dementia

As startling as the statistics are, the truth is that the physical and emotional impact of Alzheimer’s and related forms of dementia are immeasurable. In addition to physical and mental stress, the disease can wreak havoc on finances, which is why it’s so important you factor it into your retirement planning. 16.1 million people provide unpaid care to loved ones with Alzheimer’s and related forms of dementia. In 2017, those caregivers provided an estimated 18.4 billion hours of care valued at $232 billion.

As dementia progresses it becomes impossible for the person affected to work, forcing him or her to take an early retirement. And, even if you are not the one with the disease, family caregivers bear the financial burden of care. Family caregivers often have to choose between work and caregiving duties, taking additional time off work, and some even fully leaving their jobs for caregiving.

The 2018 C.A.R.E. Study from Northwestern Mutual found that while Americans realize they will most likely need long-term care at some point, 73% had not planned financially for their own long-term care needs.

Financially Preparing for a Future with Dementia

We can never know what the future holds and that’s why it is so important to be prepared for the worst. Knowing that we or a loved one can develop Alzheimer’s or a related form of dementia should urge us to have our affairs in order before diagnosis. Immediately following a diagnosis is not the best time to make financial and legal preparations as more pressing and stressful matters arise. However, if you and your family wait too long, the person will dementia will not be able to legally or ethically make his or her own decisions regarding finances, wills, care options, and more.

Planning early will allow the person affected to decide who will be in control of their estate as the disease progresses and decision-making becomes difficult. Because dementia is progressive, it’s important to plan before a diagnosis and make your wishes known, saving time, money, and stress in the future.

Important steps to start financially preparing for a dementia diagnosis include,

  • Setting up automatic payments for bills.
  • Arranging for income (including Social Security, pension payments, savings withdrawals) put directly into your bank account.
  • Ask someone to become your agent. This person will take care of your money and property as the disease progresses.
  • Sign a financial or durable power of attorney, giving your agent access to your estate.
  • Make an appointment with a fiduciary financial advisor to review your savings plan and discuss who has access to your estate.
  • Put all important documents (insurance and investment policies, bank and retirement accounts, loans, etc.) in one place and let a trusted person know where they are.

Get Financially Prepared for Your Retirement Needs

Have you or a loved one recently been diagnosed with Alzheimer’s or a related form of dementia? There are people who can help you through this difficult time. Start by contacting a fiduciary financial advisor. A fiduciary financial advisor will conduct a financial planning assessment to help you create a strategic and holistic financial plan to ensure the safety of your estate.

Connect with a qualified financial advisor to make sure you are addressing all your retirement needs.

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