Planning for Alzheimer’s: How financial advisers can help

Carolyn McClanahan

Carolyn McClanahan

Long-term care is a major wild card in any financial plan, but managing the risks associated with Alzheimer’s is especially difficult.

Research by the National Heart, Lung and Blood Institute and Boston University shows that 65-year-old-women have a 20 percent chance of developing dementia, and a 17 percent change of Alzheimer’s; for men, the corresponding figures are 17 percent and 9 percent.

The costs of long-term care can be high. The national median daily rate for a private nursing home was $212 last year – a figure that has been rising at five-year annual growth rate of 4.19 percent, according to the Genworth Cost-of-Care study. Genworth data suggests the average long-term care claim is about three years, during which time a room in a nursing home would cost an average $260,000; in-home care by a home health aid would cost an average of $136,000.

But the trajectory of Alzheimer’s can change that math significantly – and unpredictably. “It can take a number of years to go from early to late – on average, people live from three to eight years with Alzheimer’s,” says Ruth Drew, director of family and information services at the Alzheimer’s Association. “But it can go on for 15 to 20 years. The financial plan needs to be informed by the trajectory and what the needs will be along the way.”

My column this month explores the valuable role that financial advisers can play in assisting clients – and not just with the math.

“Who will take over managing your affairs when you get to a point when you can’t take care of that yourself,” says Carolyn McClanahan, founder of Life Planning Partners in Jacksonville, Fla.,  and a physician with a background in family medicine . “What can I do as a planner if I see you starting to make bad financial decisions?”



  1. This article is a good start. Too few people think about these issues – let alone plan for them. Costs for at-home 24/7 agency care in California range from $15,000 – $18,000 monthly depending on where you’re located.
    Engaging a fiduciary, trustee or signing a trusted advisor to your medical and financial power of attorney is one way to go. Get the plan in place and be sure to update it annually. Change occurs and you’ll want the plan to remain current. This is time well-spent with an estate planning, elder law or family law attorney, who will then have a track record of your wishes if someone objects.

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