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RETIREMENT COMES with many risks, but the scariest I’ve witnessed is dementia. It’s estimated that more than six million Americans are living with Alzheimer’s, and they account for just 60% to 80% of all dementia cases.
Other types include vascular dementia, frontotemporal dementia, Parkinson’s disease dementia and Lewy body dementia. Drug side effects, brain injury, depression and alcoholism can create dementia symptoms, too. The symptoms may get better when those conditions are treated.
Whatever the cause, dementia can lead to memory loss and serious difficulties handling everyday activities of daily living. Seniors with cognitive issues are at significantly higher risk of making poor financial decisions, and are more susceptible to fraud and abuse, according to a report by researchers from the Federal Reserve and the University of Michigan. They also tend to withdraw from financial responsibilities.
That last symptom—financial withdrawal—I saw firsthand with my mother-in-law and my wife’s widowed aunt. Both women had been quite capable money managers in their prime. As their cognitive issues progressed, however, they lost interest in their finances and were happy to allow family members like me to take over.
Often, there are subtle signs before significant symptoms of cognitive decline become apparent. My close friend John said the first sign of his wife Mary’s terrible illness was getting a late notice on a bill—something that she would never have allowed before.
Mary developed symptoms of frontotemporal degeneration (FTD), which is the most common form of dementia for those under age 60. FTD is not well known, is widely misunderstood and is often misdiagnosed. Symptoms include “progressive changes to personality, language, decision making, behavior, and movement.”
John and Mary aggressively pursued a diagnosis through one of the major hospital systems in the Philadelphia area. They tried various treatment options and even participated in some trial studies. Unfortunately, none of this prevented Mary’s symptoms from worsening.
She soon required constant care. Her decline coincided with the COVID-19 pandemic, which made finding help that much harder. Her family pitched in to take care of her. Eventually, though, it got to the point where the required care was too great. John had been researching facilities and was able to place Mary in one near her family and friends. She passed away earlier this year at the far-too-young age of 67.
Caring for a senior with dementia can be exhausting and expensive. The Alzheimer’s Association outlines several care options, including in-home care, adult daycare, long-term care and hospice. It suggests using Genworth insurance company’s tool to find the median cost of many of these services in your city and state.
As you might expect, there’s a wide variation in cost. In my state of New Jersey, the median cost for a private room in a nursing home was $145,818 a year in 2021. In Arkansas, the same room cost $80,300. A home health aide working 44 hours a week in New Jersey would be paid an average $68,526 a year. In Arkansas, that aide would get $50,336.
What can we do to reduce the risk of this illness? Keep working. An article from HealthDay suggests that delaying retirement may reduce the risk of early onset dementia. It cites a French study of 429,000 self-employed workers, which found a 3% reduction in dementia risk for each extra year worked.
The data seems to be in line with the “use it or lose it” hypothesis of brain health. The study showed an association between higher retirement age and lower dementia risk, but not a cause-and-effect relationship. One Alzheimer’s expert said she wasn’t surprised by the findings.
“There seems to be growing evidence that staying cognitively active is really important to reducing a person’s risk, and perhaps professional activity may be one of those cognitive activities,” said Heather Snyder, director of medical and scientific operations for the Alzheimer’s Association, as quoted in the HealthDay article. “Things that promote lifelong learning seem to be beneficial. But that may mean different things for different people… and exactly what that is, we can’t define at this point.”
The lesson for each of us is to prepare as best we can. Stay as healthy and active as possible. Get your finances organized and simplified. Talk to family and have legal papers drawn up specifying how you want your affairs handled if you lose capacity. Get all your estate documents prepared and make sure family members know where to find them.
Richard Connor is a semi-retired aerospace engineer with a keen interest in finance. He enjoys a wide variety of other interests, including chasing grandkids, space, sports, travel, winemaking and reading. Follow Rick on Twitter @RConnor609 and check out his earlier articles.
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Glad to see that FTD is getting some publicity. My wife was diagnosed with the subtype Primary Progressive Aphasia last year. The primary feature is the loss of ability to communicate, and over time can involve behavior, movement, memory, etc. No treatment or cure. Survival 2-20 years. Every case is different. These lesser known dementias need more recognition in the medical community and more research dollars.
This is timely, as I just finished reading Amy Bloom’s “In Love” about her husband’s diagnosis of Alzheimers, his decision to end his life at Dignitas in Switzerland while he still had some capacity, and her assistance. I had already made the decision that if I get any of the dementia diagnoses I will try to do the same. My immediate family is in another country, and even if I were living near them, I would not want to put this burden on them, and I would not want to spend years in “memory care”, with no memory or awareness.
Good article Richard! “Losing it” is the primary concern for many seniors, myself included. I was a very busy IT executive until I retired at age 66 eleven years ago. I like to stay busy and do so in a variety of ways. I am on the board of 2 retiree associations. One of these has a membership of 65,000, and I am the treasurer of the much smaller one. I enjoy serving on those boards and it keeps the brain cells working. I am active in our church and currently serve as the lead facilitator for one of our ministries. I also handle our personal finances and have 2 acres of land to care for.
I feel blessed to still be able to do those things but I also recognize that the risk of dementia increases as we age. It is the curse of old age for many.
Tragically, most elder care financial abuse comes at the hands of a family member. It can be very difficult to find a trusted and competent family member to take responsibility for the elder member’s finances when/if the time comes.
I agree. I think whoever is handling finances for the loved one should be required to report all financial activity to another party. It could be another relative or an attorney or an accountant. If properly done, this should greatly reduce financial abuse, i.e. fraud.
In my case, I will have our son and daughter to share the responsibility.
I worried about that with my mother-in-law and my wife’s aunt. When I took over their finances, provided regular statements to my wife and her 4 siblings. I insisted on meetings several times a year to review their finances, actions taken, and future plans. I made them vote on everything. I also chatted frequently with her two older brothers to run things by them. I wanted complete transparency. It worked well and there were no issues. Jab’s story is indeed heart wrenching.
Jiab Wasserman wrote a heart-wrenching story about this issue:
https://humbledollar.com/2022/01/brotherly-betrayal/
Thanks for an excellent article. My aunt, who never married , was an accountant and excellent at investing and money management . The first symptom was loss of ability to handle finances. Fortunately she had a niece and nephew to help (some either don’t have family or if they do they don’t want to help). Physically she became frail and we were unable to care for her at home. Good help was not often available . She spend 7 years in a private room in a Massachusetts skilled nursing home before passing at age 92. The current cost there is nearly 200k a year , at the time she was there about 145k a year. We also had other out of pocket expenses (clothes, shoes, gifts for the aides, hair dresser). She also needed podiatry care from time to time, which is not usually covered under Medicare except for specific circumstances .
Thanks Paula. It sounds like you and your family took good care of your Aunt.