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What You Need to Know About Alzheimer’s and Financial Planning

What You Need to Know About Alzheimer’s and Financial Planning

September 07, 2021
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Receiving any serious medical diagnosis is tragic, but an Alzheimer’s diagnosis is particularly devastating. Understandably, patients and loved ones will be worried and fearful, to name just a few emotions. From this point forward, financial planning is critical to ensure proper care, protection, and comfort. During this difficult time, we at 1on1 Financial want to reassure you that good financial planning now will help give you peace of mind for the future.

Types of Alzheimer’s Care

The type of care an Alzheimer’s patient will need depends on both the progression of the disease and the abilities of family or friends to assist with personal care. Although everyone’s situation is different, most Alzheimer’s patients will need to plan for:

  • Ongoing medical care to help treat symptoms and track the progression of the disease
  • Safety devices such as home safety modifications or services
  • Prescription medications
  • Personal care needs

As the disease advances to more severe stages, Alzheimer’s patients will eventually no longer be able to drive themselves to medical appointments or the grocery store, and should not be left alone for long periods of time. Depending on how much care loved ones can assist with, patients may need adult day care, in-home care services, and eventually full-time residential care.

Costs of Alzheimer’s Care

As you can imagine, the costs of these different needs and types of care can add up quickly, which is one reason why it’s important to develop a financial plan as soon as a diagnosis is made. A good financial plan increases the likelihood that an Alzheimer’s patient can continue to live comfortably as the disease progresses. And creating the financial plan early ensures the patient has control over what decisions are made.

Long-term care planning differs from Alzheimer’s care planning because long-term care is based on unknown scenarios. With Alzheimer’s care, you know more about what to expect. The projected life expectancy for a patient diagnosed with Alzheimer’s is 3-11 years, but some patients can live for 20 years or more. (1) Care costs vary by location and the type of care needed, but average life expectancies provide clarity on the amount of time you may need to plan for. 

For example, the cost of adult day care in the Los Angeles area for 40 hours a week may cost close to $20,000 a year, while a private room in a residential nursing home in the same area could cost over $126,000 a year. (2) To project costs in your specific area, you can use this Cost of Care Calculator from Genworth, which also allows you to project how costs will rise in the future based on inflation.

Planning for Alzheimer’s Care Costs

Unfortunately, Medicare does not cover ongoing care, so it is not an option to consider when determining how to pay for Alzheimer’s care costs. Additionally, a long-term care insurance policy cannot be purchased after an Alzheimer’s diagnosis, so unless you or your loved one has purchased long-term care insurance prior to diagnosis, insurance is not an option either.

Fortunately, you have other choices. Consider 1on1Eldercare, a boutique elder care agency that caters to all levels of long-term care (including Medi-Cal and private pay options), which offers pre-planning to make sure your estate is in order, and provides Medicare and health insurance evaluations. An expert financial planner can help you navigate the Medicaid and Social Security options available to you and help you structure your investments and manage your cash flow to adjust to these new necessities.

Trusted Partnerships

An Alzheimer’s diagnosis can feel alienating, so it’s vital to remember that you don’t have to walk this journey alone. If you’ve recently been diagnosed, reaching out to trusted family members or close friends can help relieve the burden, make tough decisions, and ensure your plans are followed when you eventually need more assistance. 

Just as important, partnering with a financial expert can help you navigate these new challenges. Our 1on1 Financial team is committed to helping you plan for difficult times and make the final years of your life as comfortable and secure as possible. We pledge to serve you as we would serve our own family, and we prioritize developing lasting, meaningful relationships based on trust, integrity, and superior service. Call our office today at 909-981-1720 or simply click here to schedule a free 15-minute introductory phone call.

About 1on1 Financial

1on1 Financial is an independent financial advisory firm specializing in guiding working and retired professionals, executives, and business owners along the path to financial well-being. Founded in 1997, we use a team approach to help our clients accumulate wealth, generate income, preserve their life savings, and strategically plan for the distribution of their estate. With more than 50 years of combined experience in the financial services industry, we remain true to our fundamental mission: to provide personalized guidance, treatment, care, and service so our clients can gain control of their future and feel confident in their financial life.

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(1) https://www.mayoclinic.org/diseases-conditions/alzheimers-disease/in-depth/alzheimers-stages/art-20048448#:~:text=The%20rate%20of%20progression%20for,diagnosis%20can%20affect%20life%20expectancy 

(2) https://www.genworth.com/aging-and-you/finances/cost-of-care.html