In fact, it was about a year ago that my parents put a down payment for a condo in a care community that had yet to be built but was slated to open in 2021. In addition to the cost of the condo, my mother and father would each have to pay a monthly membership fee that gave them access to a broad spectrum of services offered, from routine health care to memory care to hospice. The fees ranged from $4,000 a month for people like my mom who are healthy when they become members to nearly $15,000 a month for someone like my father who joined after being diagnosed with Lewy Body dementia, should they or when they need care.
Even for families with resources and means, large expenses such as these are tough to swallow – particularly when we thought our parents would be spending their hard-earned savings during their golden years on doing more of the things they loved, like travel not paying for round-the-clock dementia care.
By highlighting the true cost of dementia, my firm hopes to equip each of our advisors with the information they need to have proactive conversations with families about how their wealth plans can accommodate a devastating health diagnosis. Big expenses, as most people know, are easier to manage if you have planned and prepared in advance.
Even with the data in hand, I know it’s not an easy conversation to have. Thinking about how you might manage costs associated with a disease you don’t even know you will get isn’t something most people want to spend time on. It’s not like planning for your children’s college tuition, which is also expensive, but seen as a positive expense.
However, having been through this process with my father and witnessing first hand just how big of a chunk dementia care can take out of a retirement nest egg, I’m telling anyone who will listen that planning for a possible health issue such as dementia in retirement is in their best interest.
Once we realized just how much dementia care can cost, my brother and I both purchased long-term care insurance to provide our families with some financial protection should we receive a similar diagnosis in the future. The policies we chose are actually hybrid policies that work like life insurance if long-term care is never needed but help pay for care if it is. We also made sure we had current Powers of Attorney in place.
These conversations we had, first with ourselves and then with our families, were certainly not easy. There is a lot of emotion involved. But if there is anything I’ve learned over this 18-month journey with my dad, is that good health can change in an instant. Having a thought-out plan in place should that happen can make a big difference for your family, not only mentally and emotionally, but also financially.
Wally Chapman is the central division director at RBC Wealth Management-U.S.