Why It Matters:
·
The average lifetime cost of care
for dementia has skyrocketed to an estimated $350,174
·
According to the Alzheimer’s
Association, someone develops the disease every 65 seconds
·
More than 16 million Americans care
for loved ones afflicted with dementia
WRITTEN
BY: RYAN BESCH | TRANSAMERICA OCT. 30, 2019
Is the road to hell really paved with good
intentions? If we’re speaking of a specific financial hell, then those who give
the most may be giving away everything.
For the millions of selfless individuals who
care for loved ones afflicted with Alzheimer’s disease or other forms of
dementia, the emotional and physical cost of the role is sky-high.1 Tack on the financial cost of care, and the
toll can seem insurmountable.
According to the Alzheimer's Association, the
average lifetime cost of care for dementia in the U.S. is about $350,174, with
families footing about 70% of the bill.2
To better understand the challenges facing
caregivers and their families, the nonprofit Transamerica Institute® surveyed more than 3,000 non-professional
family caregivers nationwide. The findings are telling:3
·
Among those currently
employed (or who’ve been employed during their time as a caregiver), 3 in 4
have made some type of adjustment to their employment as a result of their
caregiving duties
·
Seventy-five percent
of caregivers don’t receive any form of financial assistance or payment for
their work
·
Fifty-five percent say
that their own health is taking a back seat to the health of their care
recipient
·
Sixty-nine percent
gave little or no consideration to their own financial situation when deciding
to become a caregiver
·
Forty-three percent
cite “just getting by” as a current financial priority
·
One of the biggest
indicators of a caregiver’s long-term financial security is their total
household retirement savings. Transamerica Institute’s survey found that
caregivers have saved $68,000 (estimated median) in total household retirement
accounts
Almost 1 in 5 caregivers say
that they have taken a loan, hardship withdrawal, and/or early withdrawal from
their retirement accounts as a result of becoming a caregiver.4
A new game plan
Consider following this five-step framework
for navigating dementia and financial planning, developed by researchers at the
MIT AgeLab.
Step 1: Assets
Beyond the assets already under management,
like retirement savings or investments, consider property, household items,
real estate, etc. Whose name are they in? What is their estimated value?
It may be helpful to sit down with your
financial professional to iron out your or your loved one’s assets and how they
are to be managed in the future.
Step 2: Income and insurance
Identify all your current income sources,
including benefits, disability payments, Social Security, annuities, and
pensions. Consider how these could be affected by changes in family
circumstances.
Your financial professional can help you
identify your main income sources and determine whether your current insurance
plan(s) are fitting for the future.
Step 3: Intentions
It can be difficult to envision the impact of
dementia and how the disease progresses, but talking about this early could
help you and your family flesh out wishes and intentions, reducing stress
later.
Where does the afflicted want to live as the
disease progresses? How does he or she want care to be managed and delivered?
How can he or she be sure finances will be safe?
Step 4: Banking and administration
As the health of loved ones with dementia
declines, they will need more help managing day-to-day finances, including
tracking expenses and paying bills.
Though you or family members may have already
stepped in to lend a hand, it still makes sense to sit down with your financial
professional to ensure your loved one’s wishes are being met.
The Social Security Administration features a
helpful page on representative payees.5 This
person, usually a family member or close friend, is appointed by the Social
Security Administration to manage a loved one’s Social Security benefits. A
representative payee must use the benefits to pay for the current and future
needs of the beneficiary.
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.
Do you and your loved one prefer in-home care
to nursing care? What about assisted living? Is there a long-term care policy
in place? The Health and Human Services’ LongTermCare.gov has a “finding local
services” page to get you started.6 Once again,
we recommend sitting down with your financial professional to get your plans
down on paper.
Things to Consider:
·
The earlier you have
conversations about financial planning and dementia, the better
·
Learn how to identify
the 10 warning signs of dementia
·
You may feel confident
with your current plan, but understand dementia is a progressive disease. How
far are you thinking ahead?
1"Facts and Figures," Alz.org, accessed September 2019
2 "2019 Alzheimer's Disease Facts And Figures,"
Alzheimer's Association, 2019
3 "The Many Faces of Caregivers: A Close-Up Look at
Caregiving and Its Impacts," Transamerica Institute, 2017
4 "Caregiving is Risky Business for Family
Caregivers," Transamerica Institute, September 2017
5 "Representative Page," SSA.gov, accessed
September 2019
6 "Finding Local Services," LongTermCare.gov, July
2019
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.
About Transamerica Institute®
Transamerica Institute® is a nonprofit,
private foundation that is funded by contributions from Transamerica Life
Insurance Company and its affiliates and may receive funds from unaffiliated third
parties. For more information about Transamerica Institute, visit
transamericainstitute.org.
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