With the incidence of Alzheimer's and other forms of cognitive decline projected to rise, this insight from Merrill Lynch Wealth Management could help you prepare financially for a day you hope never will come.
More and more families today find themselves touched by the tragedy of Alzheimer's. Fifty million people globally were living with the disease in 2018, and by 2050, that number is projected to multiply to 152 million, according to Alzheimer's Disease International. There is also increasing public awareness of the emotional and financial toll that Alzheimer's and other forms of dementia can take.
Your advisor can help you come up with a plan that helps you manage the extra financial costs involved, but keeping your loved one safe at home often falls on you alone. Merrill Lynch Wealth Management's Director of Financial Gerontology, Cynthia Hutchins, recommends taking the following simple steps to care for your family member even as you grapple with the financial challenges of caregiving.
How would you pay for care?
A big part of that planning involves what to do if someone needs full-time nursing care at home or in a residential facility. Purchasing long-term-care insurance far in advance of when it may be needed is one way to help cover that large expense. Having adequate life insurance, too, could be crucial. Starting early can be advantageous when considering how to handle the health-related costs of later years.
"Another essential part of preparing for a family member's cognitive decline is to make sure you have access to financial accounts and documents," says Hutchins, who suggests recording critical information such as passwords and storing important papers in a secure location that family members can get to if necessary.
Financial early-warning signs
The early indications of cognitive decline are often hard to identify. What starts as neglecting to pay bills can accelerate to impulsive spending, large account withdrawals or calling a financial advisor multiple times a day.
One way for family members to get an early warning about potential cognitive issues, Hutchins says, is to create a document authorizing a financial advisor to reach out to a family member or another trusted person if there are signs of problems.
Having the difficult conversation
The starting point of any strategy for dealing with cognitive decline is a frank, open discussion, says Hutchins. "This is a hard conversation to have, but it can empower everyone by identifying the needs, preferences and goals of a family member." Those may include where that person wants to receive care and who will manage finances.
If it falls to you to prompt the conversation, Hutchins suggests asking whether your parent has thought about what will happen if he or she can no longer care for himself or herself. "Make sure they understand you are not trying to take away their independence," she advises.
Caregiving made (a little) easier
Families also need to consider who will take the role of primary caregiver and the financial implications of that choice. You may decide to leave your job to provide care, and as the disease progresses, to hire part-time aides to help with personal care and companionship, or you might consider adult daycare or respite care at a residential facility. Finding an Alzheimer's support group in your area can also help.
• For more information, contact Merrill Financial Advisor Karie OConnor of the Northbrook, IL office at (224)775-5153 or Koconnor6@ml.com
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