According to statistics from the Alzheimer’s Association, there are 5.6 million Americans 65 and older living with the disease, a number that is expected to reach 7.1 million by the year 2025. Furthermore, a staggering 16.2 million family members and other unpaid caregivers across the country provided an estimated $233.9 billion in care to those afflicted with Alzheimer’s in 2018.
These eye-opening statistics provide a snapshot into the challenges brought on by an Alzheimer’s diagnosis. As a certified financial planner, clients often ask me how they can help a parent or loved one facing Alzheimer’s manage their money and make important personal finance decisions.
Here are a few tips:
While there is no surefire way to predict an Alzheimer’s diagnosis, cognitive decline is still a natural part of the aging process. Therefore, as your loved ones begin to age, it is essential to begin devising a comprehensive financial game plan.
Start by discussing their short, medium, and long-term financial goals and objectives over the next several years. You also want to familiarize yourself with their investments, bill payment schedule, debt situation, and charitable intentions. Although it is a difficult conversation, having these discussions and drawing up action plans while mental capacity is intact can help ensure you are well-equipped to lend a helping hand in the event of either an Alzheimer’s diagnosis or severe cognitive decline due to aging.
Take a Measured Approach
One of the biggest challenges for Alzheimer’s patients is the slow loss of autonomy. While we all want to hold onto our independence and decision-making power as long as possible, there comes a time when those afflicted with Alzheimer’s may be best served relinquishing financial control to loved ones. But caregivers can ease this difficult process on all fronts by aligning their level of control and influence with the natural progression of symptoms.
For example, you may not need to invoke a Power of Attorney and remove all authority in the early stages of a diagnosis. Instead, you can simply start to assume more of an active role by reviewing statements and paying bills together, helping them balance their checkbook, and giving them cash instead of credit cards. This approach preserves that critical sense of independence, while also ensuring you are keeping a vigilant eye on all affairs and transactions. Of course, as symptoms progress and once simple financial tasks become nearly impossible, you can certainly increase your role and influence in their financial affairs.
Monitor for Fraud
It is no secret that those with Alzheimer’s and cognitive decline are a common target for scammers. As you take on a more active role in helping a loved one with Alzheimer’s manage their finances, make it a point to look for instances of financial fraud. Common red flags include double payments, extraneous subscriptions, and uncharacteristic withdrawals.
As a caregiver for someone with Alzheimer’s or dementia, taking simple steps such as limiting credit card use, setting up automatic payments, and regularly reviewing credit reports can go a long way in helping to keep your loved ones safe and comfortable as their cognitive decline progresses.
Don’t Neglect Your Own Goals
While caring for a loved one with Alzheimer’s or severe cognitive decline is certainly noble, it’s important to recognize the toll that it can take on the caregiver. According to the Alzheimer’s Association, those caring for someone with dementia report emotional, financial, and physical difficulties twice as often compared to those caring for people without dementia. Furthermore, many caregivers must cut back at work and dip into their retirement nest egg in order provide the appropriate level of care.
There are certainly insurance options and other resources/support avenues available to soften the burden, but it is critical that caregivers do not lose sight of their own financial objectives along the way. Doing so could compromise retirement savings and other long-term goals.
While it’s only one facet, understanding how to prioritize financial affairs and decisions can help patients and caregivers alike more effectively navigate an Alzheimer’s diagnosis.
Sabina Sewillo is a Family Wealth Advisor, Vice President and Financial Advisor with the Wealth Management Division of Morgan Stanley in Chicago. The information contained in this column is not a solicitation to purchase or sell investments.