By the time doctors diagnosed Nancy Carlson's husband with frontotemporal degeneration (FTD), a little-known form of dementia that can strike people under age 60, the damage — both physical and financial — had already been done.
Once affable and organized, Carlson's husband Barry McCool had become irritable and erratic. He'd taken out tens of thousands of dollars in loans that he couldn't pay back, racked up astronomical credit card debt, and owed back taxes to the IRS.
“It wasn't him," Carlson says, “It was the disease. I had no worries before the disease hit. He was so on top of things. But then it spiraled."
Today, more than seven years after Barry's diagnosis and a year after his death, Carlson, a well-known author and illustrator of children's books, is trying to put her financial life back together.
“There is basically not one penny left," she says.
Carlson's story is one other spouses, children and caretakers of individuals with dementia know all too well. Dementia-related diagnoses are rising sharply, according to the Alzheimer's Association, the number of Americans living with dementia may nearly triple by 2050. Because age is the primary risk factor with Alzheimer's, Baby Boomers, the first wave of whom are now in their early 70s, are a driving force behind this trend.
“The odds are that you are likely to have some experience with this disease either directly or as a close family member," says Angie O'Leary, head of Wealth Planning for RBC Wealth Management-U.S.
The increased prevalence of dementia may have a transformative impact on the health care system overall. What may not be obvious is the negative financial impact the disease will have on a generation of Americans and their families.
“Financially, a dementia diagnosis is one of the most devastating," says CEO of RBC Wealth Management-U.S. Michael Armstrong, “For many families the implications are not visible until they look in the rear view mirror."
For those facing dementia at a young age, the circumstances can be particularly dire. A study funded by the Association for Frontotemporal Degeneration (AFTD) and published in November 2017 in the journal Neurology found that young-onset dementia — and specifically FTD — can cost $119,654 annually, nearly two times the average annual costs associated with Alzheimer's.
“Nancy and other FTD caregivers have reported to us firsthand the uniquely devastating financial impact of young-onset dementias," says AFTD CEO Susan L-J Dickinson. “This study gives us numbers to go along with the anecdotes – and the financial toll of this disease is even more devastating than we imagined."
Given the devastating impact dementia can have on the financial health and future of families, RBC Wealth Management is committing additional time and energy to educating advisors and clients about the disease.
“If you or your loved one is diagnosed with any form of dementia, the financial stakes are high," Armstrong says. “We as an industry have a responsibility to help our clients and their families navigate these tough waters. Planning ahead for the unexpected and having a ready action plan designed to safely transition financial and legal capacity can help manage the financial implications."
Dementia's toll on financial decision making
One of the early warning signs of Alzheimer's and other forms of dementia is decreased or impaired judgment and decision-making. This may become particularly noticeable in how someone is handling money.
Difficulty organizing and paying bills was the first sign O'Leary noticed in her father-in-law who died of dementia-related complications. “Usually, he always had everything well-organized and filed away. When we saw bills and statements covering most of the open surfaces in his house, we knew something was up. Luckily there was no serious missteps, but unraveling the mess and getting things back on track took months."
But families may not realize what is happening until it's too late.
That was the case for Carlson. Since the very start of her career, Barry had served as her business manager. He handled her book contracts, arranged her speaking engagements and managed the couple's finances.
But in 2008-2009, the book contracts and speaking engagements started to dry up. Carlson first chalked it up to the recession, but soon she began to discover it was a series of bad financial decisions that were impacting not only her business, but the couple's financial stability.
Unbeknownst to either Carlson or her husband, Barry was suffering from FTD. For Carlson, Barry's diagnosis was a relief; an explanation of the uncharacteristic behavior he had exhibited for years leading up to his diagnosis.
The real cost of care
The diagnosis also resulted in a plan of action and a need for services and care that ushered in additional expenses and financial hurdles Carlson never imagined she'd face.
The Alzheimer's Association 2017 Alzheimer's Disease Facts and Figures report indicates that people age 65 and older with Alzheimer's dementia on average survive of 4 to 8 years after diagnosis, with some living as long as 20 years. Families typically step in as the caregivers or coordinators, especially early in the diagnosis.
Caregivers initially help with routine activities like shopping and medical appointments, but those duties often evolve to assisting with bathing and dressing. For many families, this adds to the financial burden in the form of lost wages, career disruptions and out-of-pocket expenses.
As the disease advances, care may become more than a family member can handle, eventually requiring home or transition care, and generally culminating in a skilled memory care facility. In fact, most people with dementia spend 40 percent of their time after diagnosis in a skilled memory care facility.
“Even for those with supplemental insurance, the costs can be significant and for many, so great that they lead to financial ruin," O'Leary says.
Most of the non-medical care costs associated with dementia are not covered by Medicare or traditional health insurance.
The good news, O'Leary says, is there are more options today than ever before. Hybrid insurance policies as well as some life insurance sometimes provide financial relief. But the key is to have the insurance in place before the diagnosis, particularly if there is a family history of dementia.
Retirement dreams and new realities
Dementia can force even high-net worth families to push the reset button on long-held dreams.
“We had plans when [our] kids were done with college, that we wanted to downsize," Carlson recalls. “We were going to get a van and travel around for the winters but I would still work. We thought maybe we'd buy a cabin someday."
She'd also planned to pay for each of her kids' college education, help them buy a home and maybe even contribute toward her grandchildren's education. Many of those dreams may have become realities if dementia hadn't struck her family.
“This isn't the future I thought I would have, but it's OK. We have different things now and they are just as fun," Carlson says. “But I do think [the impact of dementia] is a good thing for people to understand."
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