Planning for the Financial Cost of Alzheimer’s

financial PlanningWhen a family member receives a diagnosis of Alzheimer’s, you will probably start imagining all the ways your life will change in the future. If you volunteer to have a hand in caring for your loved one, or are “volunteered” out of necessity, then your life could be dramatically upended. One big thing to think about and start planning for is the financial cost of Alzheimer’s.

Alzheimer’s Is Expensive

Alzheimer’s and dementia come free of charge, but they can have profound financial complications for your loved one, you, and the rest of your family. By the time Alzheimer’s is diagnosed, it is likely that your loved one’s symptoms have been showing and getting worse for some time. One slight silver lining is that Alzheimer’s tends to progress gradually, which means you will have plenty of time to plan. Additionally, though it is impossible to predict the specific symptoms your loved one will experience or how quickly the disease will progress, you can at least be assured that your loved one’s care needs will continue to grow.

Perform Early Estate Planning

The first thing you need to do while your loved one is still able to make financial and health decisions is to ensure that they create or update all of their important estate planning documents, including:

  • Durable power of attorney
  • Durable power of attorney for healthcare / Advanced directive
  • Living will
  • Living trust

Eventually, if your loved one lives long enough, they will become incapacitated. These documents will clearly assign responsibility for their healthcare and financial management to a chosen individual and will articulate your loved one’s healthcare and estate wishes, which can limit uncertainty and family squabbles.

If your loved one owns significant assets, this is also a good time to set up an appointment with an estate planning attorney and/or an elder law attorney. A knowledgeable attorney may suggest that your loved one create a specialized trust or begin planning for future long-term care needs. If your loved one has Alzheimer’s, it is all but certain that eventually they will someday need long-term care. (You can learn more about estate planning with our blog post: Mom Has Alzheimer’s. Can She Make Health Care and Financial Decisions for Herself?)

Provide Care Yourself, Hire a Health Care Worker, or Send Mom to a Memory Care Facility?

Alzheimer’s doesn’t just affect the finances of your loved one. It can affect yours as well. Your caregiving duties will increase as your loved one’s condition progresses. In the beginning, you may be able to just drop by for weekly check-ins. This time commitment may increase if it becomes obvious that your loved one should no longer drive. Now you have to take your family member to medical appointments, do the grocery shopping, and get your loved one “out of the house” every so often.

Eventually, your loved one will reach a point where he or she cannot stay home safely. You will need to make the decision. Should Mom move into your home, or is it time to hire a home healthcare worker to help Dad take care of her?

Bringing your loved one into your home may require you to quit your job or cut back on your work hours. Can your finances handle this? Will this affect your ability to save for the kids’ college costs or for your own retirement in the future? According to the Alzheimer’s Association, “more than 15 million Americans provide unpaid care for people with Alzheimer’s or other dementias.” This unpaid work added up to more than 18 billion hours in 2016 at a value of $230 billion.

Hiring help is an expensive alternative. According to the Genworth 2016 Cost of Care Survey, a home health aid will cost an average $3,861 per month. Medicaid coverage for home health services varies from state to state but often doesn’t cover much. You are likely to have to pay this cost out of pocket.

Memory care facilities are also an expensive option. Genworth found that the average cost for a semi-private room at a nursing home was $6,844 per month in 2016. In our home state of California, that cost was $7,604 a month. Most individuals with Alzheimer’s or dementia would be best served in a specialized facility that only focus on memory care. These facilities typically cost more than a generic nursing home. Many specialized memory care facilities do not accept Medicaid or Medicare, so costs will have to be paid out of pocket or with long-term care insurance.

It is important to begin researching your local memory care facilities before your loved one is in need of facility care. This way, you can weigh your options instead of trying to react in an emergency!

The Time to Plan Is Now

Talking about finances is never easy, especially when you and your family may be reeling from the shock of a loved one’s Alzheimer’s diagnosis. However, your loved one’s condition isn’t going away. The longer you wait to plan for the financial future, the less options you will have; the more you’ll be forced to “react” instead of taking “proactive” actions; and the more expensive things are likely to be.

If you live in Poway, 4S Ranch, or any part of San Diego County, consider scheduling a tour of Sunshine Care. Our facility is dedicated to memory care. We also invite you to our monthly caregivers support group. Hear from other families, tell your stories, and get advice from new friends who understand what you are going through!


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