Prepare for the Expected: Dementia Can Be Financially Devastating

Oct 23, 2020 / Amanda Chase, Horsesmouth Assistant Editor

Of the many risks to financial well-being, it’s clear that an extended long-term care event ranks at the top of the list. A dementia-related diagnosis can be financially devastating, and the number of people affected is on the rise. Currently, cognitive decline affects 5.8 million people, and that is expected to double by 2040, according to the Alzheimer’s Association. Not only is there a significant financial impact to the person affected by the disease, but on their caregivers as well. Yet few families factor this impact into their wealth plans.

To shine a spotlight on the importance of planning for the costs associated with dementia, RBC Wealth Management’U.S. commissioned a survey from Aon to better understand the financial impacts of dementia on families. The survey included responses from 1,000 current and former caregivers, who shared their insights and experiences.

The overall lifetime cost of care can be financially devastating, often exceeding $750,000. Financial mismanagement is a real concern, with 80% of caregivers reporting some level of financial mismanagement by the individual they cared for. Women are disproportionately providing the care and taking the financial hit.

Caregivers also share the financial burden, both directly and indirectly. 83% of caregivers surveyed shared the financial burden by contributing directly and/or indirectly, with 54% of the caregivers changing their work arrangements. Surprisingly, caregiving duties are impacting younger families, putting a further squeeze on the Sandwich Generation.

You can find the full RBC Caregiver survey and report here.

 

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