{"id":6531,"date":"2024-10-24T14:40:51","date_gmt":"2024-10-24T14:40:51","guid":{"rendered":"https:\/\/finderica.com\/5-financial-planning-tips-for-dealing-alzheimers\/"},"modified":"2024-10-24T14:40:51","modified_gmt":"2024-10-24T14:40:51","slug":"5-financial-planning-tips-for-dealing-alzheimers","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=6531","title":{"rendered":"5 Financial Planning Tips for Dealing Alzheimer’s"},"content":{"rendered":"
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More than 6.7 million people (5% of 65-74-year-olds, 13% of 75-84-year-olds, and more than 33% of those older than 85) have Alzheimer\u2019s today, and as the baby boomers age, by 2050 that number is projected to double.<\/p>\n

Additional research from the Alzheimer\u2019s Association<\/a> shows that last year millions of family and friends provided $350 billion of unpaid care \u2014 18.4 billion hours of care provided by the more than 11 million unpaid caregivers \u2014 to loved ones with Alzheimer\u2019s and other forms of dementia.<\/p>\n

The costs and prevalence of the disease are hard to ignore, and the toll it takes, both on families and their loved ones, is extensive. One area in which the disease complicates matters even more is finances.<\/p>\n

A declining ability to comprehend finances and care choices is often among the first signs of dementia, according to the U.S. Department of Health and Human Services<\/a>.<\/p>\n

So in the coming years, when there will be nearly 16 million Americans who have Alzheimer\u2019s, those people will likely have difficulty managing their financial affairs.<\/p>\n

\u201cMy mom was diagnosed with Alzheimer\u2019s in 2008 and had retired in 1999, so about nine years into retirement,\u201d says Dave Harris, vice president of the Nationwide Financial Retirement Institute. \u201cHer being diagnosed with Alzheimer\u2019s was quite a blow in two different ways: obviously emotionally, but financially most definitely.\u201d<\/p>\n

This rings true both for the individuals suffering from dementia as well as their caregivers.<\/p>\n

\u201cFamily members are already on emotional overload \u2014 adding a financial and legal decision aspect to what they\u2019re already going through is enormous,\u201d Alzheimer\u2019s Foundation of America President Carol Steinberg told CNBC <\/a>last year. \u201cTherefore, the more decisions made earlier on and with the input of the loved one, the easier it is.\u201d<\/p>\n

Five simple financial planning steps can help you better prepare for the future.<\/p>\n

1. Be Proactive: Plan Ahead<\/b><\/h2>\n

Understand the prevalence of the disease and take steps to ensure your finances are protected before you \u2014 or a loved one \u2014 are affected by the illness.<\/p>\n

\u201cThe best thing people can do is truly pre-plan,\u201d Harris says. \u201cWhen you\u2019re going through the retirement income planning process, one of the best things to talk over with a financial adviser is if down the road you would need some extended care \u2014 due to something like Alzheimer\u2019s \u2014 how are you going to pay for that?\u201d<\/p>\n

Understanding how you\u2019re going to handle the costs of care is key to planning for the future.<\/p>\n

Alzheimer\u2019s disease is the most expensive condition in the nation, according to the Alzheimer\u2019s Association<\/a>. Research<\/a> suggests that the average out-of-pocket lifetime cost to care for someone with Alzheimer\u2019s is over $400,000. <\/p>\n

Preparing in advance for these costs is essential.<\/p>\n

\u201cOnce you\u2019re diagnosed with dementia, a lot of things happen very, very quickly. The plan in place ahead of time is vital,\u201d Harris says. \u201cUnfortunately what we find is that maybe two out of 10 people actually do that.\u201d<\/p>\n

2. Get Others Involved in Planning<\/b><\/h2>\n

It\u2019s important to include others in your financial planning, says Sarah Swantner, certified financial planner with Kahler Financial Group in Rapid City, S.D.<\/p>\n

A spouse, an adult child or another trusted family member or friend should also attend meetings with financial advisers to stay \u201cin the loop,\u201d she says.<\/p>\n

\u201cOne thing we like to do is have some sort of agreement with clients that if we start to observe some changes in behavior we have their consent to notify someone, usually one of their adult children,\u201d Swantner says.<\/p>\n

Swantner says her firm has some clients who are exhibiting signs of dementia, so she and other financial planners there are thinking about different ways to prepare these people financially.<\/p>\n

While a consent agreement is not a standard process with all of Kahler Financial Groups\u2019 clients, it would be \u201cideal\u201d to incorporate as part of the initial engagement, Swantner says.<\/p>\n

\u201cWhen they\u2019re starting to exhibit signs of dementia and perhaps they\u2019re not making the best financial decisions, sometimes it\u2019s really difficult to be able to explain that to the person,\u201d she says. \u201cSometimes it\u2019s best to get a third person involved.\u201d<\/p>\n

After Harris\u2019 mother was diagnosed with Alzheimer\u2019s, he was able to take over his parents\u2019 finances, because they discussed this ahead of time.<\/p>\n

\u201cWe did the pre-planning, so it was a big benefit to my parents. Having those conversations will benefit the parent, the adult child, and also the financial adviser,\u201d he says.<\/p>\n

3. Discuss Long-Term Care Insurance Options<\/b><\/h2>\n

Part of the financial planning process includes taking a look at options for long-term care coverage.<\/p>\n

One such option is long-term care insurance, which, unlike traditional health insurance, is designed to cover long-term services and supports, including personal and custodial care in a variety of settings, such as your home, a community organization or other facility.<\/p>\n

\u201cSomething we do for every new client is a long-term care insurance analysis to see if it makes sense for them to buy the insurance as opposed to paying for care out of pocket,\u201d Swantner says.<\/p>\n

Long-term care insurance is often called a \u201cuse it or lose it policy\u201d because if you don\u2019t use the benefit, you lose it.<\/p>\n

\u201cIt can really be a lifesaver,\u201d Swantner says. \u201cIt\u2019s a gamble like any other insurance, but when you need it, it can be a really great thing.\u201d<\/p>\n

For those who buy a long-term care insurance policy at age 60, the probability that they will use it before they die is 50%, according to the American Association for Long-Term Care Insurance.<\/p>\n

And for some, that\u2019s a gamble they\u2019re willing to take.<\/p>\n

4. Create a Living Will and Appoint Powers of Attorney<\/b><\/h2>\n

Estate planning, which incorporates living wills and powers of attorney, is one of the core topics of financial planning, Swantner says.<\/p>\n

While financial planners don\u2019t physically write the documents, they are critical when looking at a person\u2019s finances, especially if the client has Alzheimer\u2019s or another form of dementia.<\/p>\n

\u201cWe make sure we\u2019re having that conversation with the client,\u201d she says. \u201cWe\u2019re facilitating making sure everything\u2019s lined up.\u201d<\/p>\n

Living Will<\/i><\/p>\n

A living will is a written, legal document that spells out medical treatments you would and would not want to be used to keep you alive, as well as other decisions, such as pain management or organ donation, according to the Mayo Clinic<\/a>, a nonprofit medical practice and research group based in Minnesota.<\/p>\n

You should address a number of possible end-of-life care decisions in your living will, including, among others:<\/p>\n