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As Tax Day approaches, families and individuals across the country are taking a closer look at their finances. During this time, The Alzheimer’s Association is encouraging families to proactively plan for the financial impact of Alzheimer’s and dementia – the most expensive disease in the country.
An estimated 5.5 million Americans are living with Alzheimer’s, including 1 in 10 age 65 and older, according to the 2017 Alzheimer’s Disease Facts and Figures report. By age 85, those living with the disease jumps to 1 in 3. The costs associated with Alzheimer’s can be staggering for families, with average out-of-pocket costs for health care and long-term care services not covered by Medicare, Medicaid and private insurance exceeding $10,000 annually.
On average, people live with Alzheimer’s 4-8 years after a diagnosis and many for longer. Disease-related costs can jeopardize a family’s financial security and many families and caregivers make enormous personal and financial sacrifices. A 2016 Alzheimer’s Association report found that nearly half (48 percent) of care contributors must cut back on their own expenses – including basic necessities like food, transportation and medical care – to afford dementia-related care, while others must draw from their own savings or retirement funds. Making plans in advance can help ease the burden on loved ones. The Alzheimer’s Association recommends the following tips to plan for the future:
Look at retirement planning as a time to think about how to prepare for the need for long-term medical care. After an Alzheimer’s diagnosis, your options may be more limited.
Conduct an inventory of your financial resources (savings, insurance, retirement benefits, government assistance, VA benefits, etc.). A financial planner or elder care attorney can help with this.
Enhance your understanding of the role and limitations of Medicare, Medicaid and other insurance options. A 2016 Alzheimer’s Association report found that nearly 2 out of three people incorrectly believe that Medicare helps pay for nursing home care, or were unsure whether it did.
Once you understand what you have for financial resources and what you can afford, make a plan with your family or a close friend for how to access care.
If you are caring for someone living with Alzheimer’s, learn about income tax breaks for which you may qualify. Caregivers likely pay for some care costs out-of-pocket. Because of this, you may qualify for tax benefits from the Internal Revenue Service (IRS). Tax rules are complex and can change. Be sure to get advice from your tax adviser or accountant before filing your returns.
Eric Creamer, Director of Public Policy and Media Relations, Alzheimer’s Association – Rhode Island Chapter