By FPA member Leslie T. Beck, CFP®, MBA
Last Updated: November 15, 2010
A study recently published in the medical journal Neurology indicates that a decline in the ability to handle money and financial issues can indicate memory problems that may signal the onset of Alzheimer’s disease.
According to the study’s researchers at the University of Alabama-Birmingham, a decline in “complex pragmatic financial skills” — such as the ability to use a checkbook and pay bills — is a reliable indicator for Alzheimer’s disease in those already exhibiting mild memory problems.
But that’s not the only link between dementia and money. According to statistics from 2006, the average lifetime cost of care for someone with Alzheimer’s disease is $174,000.1 The Shriver Report quotes a National Alliance for Caregiving study that found family caregivers providing support for someone with Alzheimer’s or other dementia without symptoms were 31 percent more likely to reduce hours or quit work altogether; when caring for someone with symptoms, that number jumps to 68 percent.
An estimated 5.3 million Americans currently have Alzheimer’s, according to the Alzheimer’s Association. While the vast majority of those with Alzheimer’s disease and other dementias are over the age of 65, it is estimated there are 500,000 Americans younger than 65 currently afflicted by the various types of dementia. It is also estimated that the lifetime risk for any type of dementia is 21 percent for women at age 55 and 14 percent for men (the difference due primarily to life expectancy).
Stories abound in the news media about the consequences of finding out too late that a loved one has undiagnosed dementia. The New York Times recently reported the story of Dr. Max Gomez, the medical correspondent for CBS News, whose father, also a doctor with undiagnosed dementia, lost everything before the family was able to intervene.
So the question becomes — what can you do to prepare for the possibility of an Alzheimer’s (or other dementia) diagnosis in a spouse, parent, or other loved one?
- Share Responsibilities. It’s never a good idea to have just one person in a family responsible for all financial transactions. Share responsibility for paying bills, reviewing account statements, etc. with your spouse or significant other. Stay active in your parents’ lives without being obtrusive. Ask them to fill out a financial organizer indicating where their important documents are kept, such as checking and savings account statements, monthly bills, wills, deeds and mortgages; and contact information for the professionals in their lives, including doctors, financial planners and advisers, accountants and attorneys. Volunteer to accompany them to meetings with those professionals, when and if possible.
- Stay Aware. Know the 10 early detection signs of Alzheimer’s disease. Notice changes in behavior, especially those involving complex skills, such as maintaining a checkbook register, understanding bank and brokerage account statements, etc. Don’t be afraid to intervene or ask questions if you suspect something might be amiss. Also, remember that due to confidentiality issues, it may be difficult for a professional such as an attorney or financial adviser to discuss a client’s behavior, actions, or account information without the client’s express consent. Discuss being a co-signer on an account or having a power of attorney for those who may be at risk.
- Be Proactive. Certain risk factors increase the likelihood of developing Alzheimer’s and other forms of dementia. The greatest is age — the risk of developing the disease doubles every 5 years after the age of 65, according to the Alzheimer’s Association. After age 85, the risk approaches 50 percent of coming down with the diagnosis. Family history is another risk factor — studies have shown those with a parent or sibling with the disease are more likely to develop it. Health issues, such as head injury, heart and circulatory problems, and diabetes also increase the risk. It’s much easier to plan for Alzheimer’s before it actually appears, so consider these risk factors when doing your financial planning.
- Get Professional Assistance. The costs of Alzheimer’s disease on families can be devastating, both financially and emotionally. A financial planner can assist you with issues such as identifying resources for necessary care (such as long-term care policies, Medicaid planning, or self-insurance); medical and durable powers of attorney; wills, living wills, and medical directives; and other community resources available to families.
So while there is currently no cure for Alzheimer’s disease, there are definitely steps you can take now to mitigate the potentially devastating effects of this disease.
Learn more about Alzheimer’s disease.
FPA member Leslie T. Beck, CFP®, MBA, is one of the founders of Compass Wealth Management LLC , a financial planning and advisory firm based in Maplewood, NJ. Leslie is also a board member of the Financial Planning Association of New Jersey.