Why Alzheimer’s Financial Burden Is Way More Than You Think

As more Americans are diagnosed with Alzheimer’s disease, it’s essential to know the resources and strategies that can help better manage the finances of those affected. Between 2000 and 2021, deaths from Alzheimer’s increased by more than 140%, and the disease is the fifth-leading cause of death among Americans aged 65 and older.

By 2050, the health care costs associated with treating Alzheimer’s are expected to surpass $1 trillion—without considering the disease’s indirect costs, such as loss of employment or unpaid care provided by family members. But the disease also brings hidden costs, as research shows people fall behind on mortgage payments, credit card bills, and other financial obligations before they are even diagnosed with Alzheimer’s.

Key Takeaways

• Alzheimer’s often has a devastating financial impact on the person with the disease, from changes in financial decision-making to significant treatment costs.
• Many people with Alzheimer’s experience changes in financial behaviors before a diagnosis is even made.
• Missing payments, making impulsive purchases, putting money into risky investments, and falling prey to scams are common problems for those with Alzheimer’s.

How Alzheimer’s Affects Finances

Alzheimer’s disease is a progressive brain disorder that gradually erodes a person’s memory, thinking skills, and ability to perform everyday tasks.

A 2024 joint study by the Federal Reserve Bank of New York and Georgetown University found that the credit scores of people who eventually developed memory disorders fell five years before any diagnosis. They also fell behind on mortgage, credit card, and other debt payments years before an official diagnosis.

The study found that two years prior to an Alzheimer’s diagnosis, the probability of credit card delinquency was 21% higher and the probability of mortgage delinquency was 11% higher than before the onset of the disease. Ultimately, this leads to both short-term and long-term financial consequences in the form of late fees and interest charges, as well as higher interest rates on credit cards and personal loans and the heightened possibility of eventual foreclosure on a home.

“The harmful financial effects of undiagnosed memory disorders exacerbate the already substantial financial pressure households face upon diagnosis of a memory disorder,” the study concluded.

This and other reports suggest that the financial impact of Alzheimer’s often occurs in stages:

Early Stage

• Difficulty tracking monthly bills or maintaining a budget
• Mistakes in checkbook balancing or basic math calculations
• Taking longer to complete financial tasks that were once routine
• Making unusual or out-of-character purchases

Middle Stage

• Understanding bank statements and other financial documents is more difficult
• Important payments are missed
• Susceptibility to financial scams or fraudulent offers

Later Stage

• Those with the disease need help with all financial matters
• Increased health care and caregiving costs
• Need for long-term care

Alzheimer’s can begin 20 years or more before tell-tale symptoms like memory loss occur.

Helping To Manage the Finances of People With Alzheimer’s

Whether you’re living with Alzheimer’s or supporting a family member with the disease, there are several crucial steps you can take.

Starting the Conversation

Many people experiencing cognitive changes may not be fully aware of differences in their financial management, while others might feel concerned or embarrassed about these changes. The key is to approach these discussions with respect and empathy, focusing on collaboration rather than criticism.

Starting any discussions early—no matter the awkwardness involved—can help everyone work together to protect financial well-being while maintaining dignity and independence. Here are some conversation starters that could prove helpful:

• “I want to make sure your finances stay secure and well-managed.”
• “Could we work together to set up some systems that make bill-paying easier?”
• “Let’s talk about ways to protect your financial independence.”

Practical Steps

Several financial management tools can help:

• Setting up automatic bill payments for regular expenses
• Creating a simple monthly budget together
• Working with a financial advisor who has experience with Alzheimer’s planning
• Discussing power-of-attorney options while everyone can actively participate in the decision

The National Institute on Aging recommends that while the person with Alzheimer’s still legally has the capacity to make decisions, you should ensure that they put a will in place. It’s also important to name someone to make financial decisions should the person with Alzheimer’s become unable to do so, and appoint a trustee to hold the title to property and funds for future beneficiaries.

Professionals who can help in these situations include financial advisors, healthcare providers, and attorneys.

The Bottom Line

Alzheimer’s affects many Americans and can have a devastating impact on finances. By working together, individuals and families can put protective financial arrangements in place that preserve both assets and independence.