Financial planning strategies for dementia-related long-term care

Overview

We’ve all had them: Moments when we’ve walked into a room and forgotten what we came in for. Or saw someone out and about and couldn’t remember their name. Or know we just had the cell phone — but now have no idea where it’s gone.

We laughingly call these brief bouts of forgetfulness “senior moments,” but in some cases, these can be early signs of age-related cognitive decline. In its mildest forms, we may just notice an increased inability to recall information as quickly. Other cases may be the first indicators of dementia — a disease that takes a physical, mental and financial toll on both the individual and those they love.

Alzheimer’s disease is the most common form of dementia, representing 60-70% of all cases.¹ While people with Alzheimer’s live three to 11 years after diagnosis on average, many individuals can live up to 20 years.²

Consider, then, that the average coverage of a long-term care policy is one to five years — which can leave some individuals with Alzheimer’s or dementia without care benefits for several years.³ Given these statistics, it’s prudent for people approaching retirement age to include the possibility of cognitive decline and dementia in their financial plans.

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