Caring and Planning for Finances with Alzheimer’s

Answer: Financial planning is crucial for caregivers of individuals with dementia or Alzheimer’s. As a caregiver, you not only manage medical information, medications, coordinate support services, household, personal needs, and transportation, but on top of all that, you’re responsible for maintaining your family’s financial security. This isn’t a challenge you need to tackle on your own. Asking for help may help you experience less stress and be more confident that you’ll fulfill your loved one’s intentions and plans for the future. 

In 2023, 11.5 million Americans provided unpaid care for people living with Alzheimer’s or other dementias according to the Alzheimer’s Association. In addition, the average for healthcare and long-term care services that Medicare beneficiaries aged sixty-five or older with dementia pay out of pocket annually is $10,829. Total lifetime cost of care for someone with dementia is estimated at almost $400,000 in 2023 dollars. Caregivers lose on average $304,000 in wages and benefits over their lifetimes as reported by Kiplinger Reports. 

As a caregiver, you’re likely managing the family’s finances and the individual’s finances. Having the uncomfortable and difficult conversations early and making appropriate plans sooner than later could be beneficial. Direct costs to consider include medical expenses, long-term care, medications, and professional caregiving services. Indirect costs are lost income if still working, reduced work hours, and out-of-pocket expenses.

Early financial planning benefits include more certainty, less stress, realistic financial assessment and preparation for future needs. Steps include organizing financial documents, understanding insurance coverage, and setting up a budget. Consider speaking with your attorney to discuss the importance of having a durable power of attorney for finances and healthcare, setting up wills and trusts to manage assets and ensure the person’s wishes are followed, and to create advance directives for healthcare decisions. It’s wise to have legal and financial strategies in place sooner than later because a person’s legal capacity to do so may decline over time. 

In addition, you could collaborate with a CERTIFIED FINANCIAL PLANNER® Professional to discuss tips for creating and maintaining a budget, setting up automatic payments, helping to monitor accounts and provide professional assistance with properly positioning assets and managing investments. These items may seem secondary compared to caregiving, yet can assist in providing quality care and providing a stable financial foundation to help provide the level of care someone deserves. 

Dementia caregiving is more common as we live longer. One in three seniors dies with Alzheimer’s disease or another form of dementia, often requiring care that may have financial implications on you and the entire family. Maintaining family finances while providing optimal care isn’t something you need to do alone. Working closely with a trusted financial professional may help alleviate your burden. 

Financial literacy for caregivers is important as it provides knowledge and skills to better support themselves and others. There are five subjects to explore when discussing financial literacy for caregivers: 

1. Intentions

Learn about what both of your expectations may be for the future. Discuss living situations and care arrangements to better prepare yourselves and your financial professional to design a strategy for now and in the future. 

1. Asset Inventory

Provide your financial professional with a complete overview of assets and how they’re titled and managed, including real estate. Would you consider downsizing and selling your home? Is home care an option, or do you prefer assisted living or need memory care? What are the additional costs, and how will they be met? 

1. Income and Insurance

Review income sources, amounts, and any insurance plans you have, including Medicare, Gap Coverage, and Long-Term Care policies or riders.

1. Cash Management and Banking 

Take advantage of direct deposit and bill pay to simplify your life. How are the accounts titled, and who is authorized to make payments on your behalf? 

1. Care Management

If demands intensify, how will you finance and facilitate them? Costs may increase for a variety of reasons, including ongoing medical treatment, prescription drugs, personal care supplies, adult day services, in-home care services, and full-time residential care services. Working closely with your team of professionals and having an awareness of available resources may be helpful. 

The emotional stress and emotional costs may take a greater toll than the financial, but both are significant. Asking for help to provide the support and assistance you need as a caregiver is essential. Stay focused, ask for help, and plan accordingly.