Rita Jablonski, Ph.D. recommends being proactive, investing in long-term care insurance, and evaluating additional financial options and benefits for dementia caregivers.As America’s population ages, a silent crisis is unfolding in millions of households: nearly 12 million Americans are providing unpaid care for loved ones with dementia, often at great personal and financial cost. Advocates and researchers say the growing demand for care is placing increasing pressure on families and the broader healthcare system.

In 2024, caregivers of people with Alzheimer’s or other dementias provided an estimated 19.2 billion hours of unpaid assistance worth $413.5 billion, according to the Alzheimer’s Association.

More than 5 percent of Americans over 65 are living with Alzheimer’s dementia, a number that is estimated to grow as the population continues to age. Additionally, it takes roughly $12,000 annually to care for someone with dementia, compared to $7,000 for someone without dementia, according to 2022 data.

“Total lifetime cost of caregiving for someone with dementia is over $400,000, and 70 percent of it is borne by family members through out-of-pocket expenses,” said Rita Jablonski, Ph.D., professor in the University of Alabama at Birmingham School of Nursing and dementia care expert. “However, there are steps families and caregivers can take to ease some of the stress.”

Be proactive

Having medical, legal and financial documents in order is a key step in alleviating the financial burden on future caregivers. This includes ensuring children or a trusted person is listed on one’s Health Insurance Portability and Accountability Act, or HIPAA, forms.

“Many will come into checkup appointments not knowing they have early signs of dementia, and it is important that that information gets back to potential caregivers,” Jablonski said. “If the caregivers are not on HIPAA forms, the doctors cannot discuss the patient’s condition. Additionally, the patient may not remember to notify their family or trusted person.”

Jablonski suggests enacting a durable power of attorney statement, a document that authorizes power to a person to act for another, for someone who will be involved with finances. She also recommends updating their will, making copies of the will or letting the person with power of attorney know where the will is kept.

For financial planning, Jablonski suggests meeting with a financial advisor as well as adding a trusted person to financial accounts for future access.

“This part can be scary for some due to the fear of financial abuse,” Jablonski said. “However, the financial advisor can help you and your loved ones realistically prepare for the future if you develop dementia.”

Invest in long-term care insurance

Jablonski encourages everyone to invest in long-term care insurance starting at a young age, which can help keep premiums low. When comparing different insurance options, she says it is important not only to look at the premiums, but to evaluate the coverage.

“Your ability to buy the comprehensive LTC insurance that your parents purchased in the late ’90s and 2000s is gone,” Jablonski said. “For that reason, you need to ask more questions about the coverage of a plan.”

Questions Jablonski suggests asking include:

• How much home care will you receive?
• Are there annual limits?
• Will they cover the cost of a nursing home for as long as needed, or is there a limit to the payout?
• Can you renew the policy regardless of health changes?
• Are premiums fixed, or will they increase over time?

Another option is a “hybrid” coverage plan where traditional LTC insurance is combined with whole life insurance. If care is never needed, the policy will return the principle plus interest to the family at death in the form of a life insurance benefit.

Evaluate additional financial options and benefits

Jablonski also encourages looking for additional financial options and employee benefits when planning for the future. Health savings accounts can lower tax liability and can accrue interest. Employee benefits, such as sick leave and short-term disability, can help if one can work during the early stages of dementia. Pension plans and IRAs typically allow one to access money before retirement age if they become disabled.

“Keeping good records for expenses is also beneficial because you and your family may be eligible for caregiver tax credits and deductions,” Jablonski said.

While the financial toll of caregiving can be overwhelming, the emotional and physical tolls do not need to be overlooked either.

“I urge caregivers to not neglect their own health or delay necessary appointments and procedures,” Jablonski said. “There are numerous resources like respite programs that can keep your loved ones safe while you take care of yourself.”