The average lifetime cost of care for dementia in the U.S. is about $322,000, according to the Journal of the American Geriatrics Society. And families are footing about 70% of the bill.
Aside from the financial demands, the emotional and physical cost of caring for loved ones with dementia is sky-high.
“Dementia represents one of the costliest diseases, and most of the responsibility of dementia care falls on families,” said lead study author Dr. Eric Jutkowitz of Brown University.
So what can we do to better prepare for the unexpected? Perhaps an old adage still provides words to live by: “Expect the best, prepare for the worst.”
A new game plan
It’s important to realize dementia doesn’t discriminate. It can happen to parents, aunts, uncles, sisters – even those under the age of 65.
Start by learning how to identify the 10 Warning Signs of Alzheimer’s and other dementias.
Once you’re familiar, check out this five-step framework for building a financial plan around dementia, developed by researchers at the MIT AgeLab.
Step 1: Assets
Since dementia is a progressive disease, planning early is always better. Start by making a list of your loved one’s assets: Retirement savings, investments, property, household items, real estate, etc. Whose name are they in? What is their estimated value?
Step 2: Income and insurance
Identify all their current income sources, including benefits, disability payments, Social Security, annuities, and pensions. It may help to sit down with a financial professional to determine this, as well as insurance needs.
Step 3: Intentions
Where does your loved one want to live as the disease progresses? How does he or she want care to be managed and delivered? How can they be sure their finances will be safe?
Step 4: Banking and administration
As the health of a loved one with dementia declines, he or she will need more help managing day-to-day finances, including tracking expenses and paying bills. Talk with a financial professional to ensure your loved one’s wishes are being met. Consider creating a convenience bank account with a trusted family member to help manage the money when the disease progresses.
Step 5: Care management
Lastly, you and your family may want to discuss how to finance and facilitate care, especially when the disease progresses and caregiving becomes more demanding.
Have you ever had to care for a loved one with dementia? Did you form a financial plan ahead of time? Share your experience below.
Neither Transamerica nor its agents or representatives may provide tax, investment or legal advice. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal advisors and financial professional regarding their particular situation and the concepts presented herein.
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