This month, Kiplinger’s Personal Finance magazine talks about how to plan ahead for Alzheimer’s and what to do after a diagnosis. As part of the reporting for Kiplinger’s series on Alzheimer’s and finances, we asked people in the Public Insight Network how Alzheimer’s has affected their finances, or those of a loved one.
The answers we’ve heard put a human face on discouraging figures just reported in the New England Journal of Medicine: that the annual cost of caring for Americans with dementia totals at least $157 million, making it more expensive than treatments for people with heart disease or cancer. A big part of this cost is borne by family members who act as caregivers to relatives with Alzheimer’s or other dementia.
Here is the story of one Minnesota family.
“My dad will be lucky to have any of his or my mom’s retirement money left over by the time she passes away,” says Naomi Lund of Robbinsdale, Minn.
Her father is 59 years old. He still works full time.
Naomi’s mother was only 49 years old when she started showing signs of dementia nearly 10 years ago. It was early-onset Alzheimer’s.
Naomi says it’s been “heartbreaking and frustrating” for her and her brothers to support their parents physically and emotionally — especially last summer when their mom was having angry, violent outbursts almost daily and their dad was struggling to cope.
Things have stabilized for now, with her mom on new medication and, she says, her dad finally accepting his wife’s diagnosis.
Now what depresses Naomi is thinking about her parents’ finances:
“Unlike most of their generation, they have diligently saved and budgeted for retirement to have it all gone before my dad can even legally retire,” she explains. “In order to receive government support, they will have to spend down all of my mom’s retirement and half of my dad’s.
“I feel immense guilt in the wish that some other fast-moving disease or stoke would allow my mom to pass away faster.”
Right now, Naomi says her father is convinced he has to sell their home. She is helping him calculate whether he should continue working — and paying approximately $20,000 per year for the group home where her mother lives so her dad can work — or if it makes better sense to retire early, despite the losses he’d take in Social Security and pension money.
This is not simple math.
For Naomi, though, the decision to save for her own the future was simple.
She doesn’t want to end up in the same situation as her parents.
She says she’s always been a saver, but her mother’s diagnosis took her saving “to a new level.”
Right now, at age 35, she is already stashing 15 percent of her income away for retirement, chipping away at her 15-year fixed-rate mortgage and putting $150-$200 into the bank each month for her son to go to college.
“As a single parent, this has really crimped my available cash,” she says. “I drive an 18-year-old vehicle and take the bus, and I pinch pennies through every means possible.
“I worry that I will also have early-onset Alzheimer’s, so in my head, I think of planning for retirement at 50, not at 65-67 like my peers.”
Early-onset, or younger-onset, Alzheimer’s is rare. The Alzheimer’s Association estimates that fewer than 4 percent of the 5.2 million Americans with Alzheimer’s today started showing signs of Alzheimer’s before the age of 65.
But Naomi’s concern for her own health is grounded in a different reality. If a parent has a mutation on one or more of three genes that cause early-onset familial Alzheimer’s, his or her child has a 50 percent chance of inheriting that mutation. And almost everyone who inherits the mutation gets the disease.
So, on top of all her other savings measures, Naomi Lund will invest in long-term care (LTC) insurance.
“I can’t afford to save for my son’s college, my own retirement and pay the premiums for long-term care insurance right now,” she says.
But in five years, when her son graduates from high school, she’ll start using the money that’s been going into his college fund to pay her insurance premiums.
Naomi thinks most people assume everything will go well with their futures. But she knows from her parents’ experience that this isn’t always the case. And she’d rather plan for the worst.
Then, if she doesn’t get Alzheimer’s in her 40s or 50s, she thrills that she’ll have plenty of money for a comfortable retirement.
You can find a lot more helpful advice on financial planning for Alzheimer’s at Kiplinger.com, and read personal stories from other people in the Public Insight Network about how Alzheimer’s has affected their finances. The Daily Circuit from Minnesota Public Radio News also hosted a discussion on the finances of Alzheimer’s recently, inspired by stories from the PIN.