When people think about retirement, they often imagine the joys of early retirement: more time with family, the freedom to travel, and the space to finally pursue hobbies and passions. But part of retirement also means facing realities we’d rather not dwell on, particularly related to aging. One of the most profound and complex of those realities is dementia. It’s not just a medical diagnosis—it’s an emotional, logistical, and deeply financial challenge.
Long-term dementia care is considerably more expensive than many other forms of care: The average total lifetime cost of care for a patient with dementia is roughly $415,936. The cost of dementia care is considerably higher than other forms of elderly patient care because dementia patients often require near round-the-clock attention and can live, on average, three to 10 years following a diagnosis. Roughly 70 percent of the total cost of dementia care is currently absorbed by family caregivers through unpaid caregiving and out-of-pocket expenses such as home health support and medications.1
While these figures represent medical expenses, in-home support, and residential care, they don’t capture the less obvious costs, such as lost income for family caregivers or the emotional toll on spouses and children. Understanding these realities is the first step toward building a financial plan that is compassionate, practical, and sustainable.
Planning vs. Reacting: Why Timing Matters
Dementia forces families into one of two paths: planning in advance or reacting under pressure. We previously discussed the importance of balancing life and financial planning in our blog, Keeping It Together: Balancing Work, Kids, and Aging Parents. Those who are unprepared often find themselves scrambling to make urgent medical, financial, and legal decisions all at once. This reactive mode can leave families vulnerable to costly mistakes and fractured relationships.
By contrast, families who have addressed the “what-ifs” ahead of time can respond with greater calm and clarity. For some, this preparation begins years before any signs of dementia emerge—often because they’ve seen it impact a parent or grandparent and want to avoid repeating the struggle. Others may recognize early cognitive decline in themselves or a spouse and choose to act quickly, perhaps by exploring retirement communities or securing long-term care insurance while it is still available.
Proactive planning doesn’t erase the pain of dementia, but it does create a framework for decision-making. It’s the difference between being carried away by the current and navigating with a map and compass.
The Limits of Medicare and Medicaid
One of the most common surprises families encounter is the limited role that government programs play in covering dementia-related care. Medicare, for example, may cover hospitalizations, doctor visits, or short-term rehabilitative stays, but it does not cover long-term custodial care—whether in a facility or at home. Families often assume otherwise, only to discover that the bulk of dementia-related costs fall on personal resources.
Medicaid does cover long-term care, but eligibility usually requires a “spend down” of personal assets to near-poverty levels. For families who have spent a lifetime building savings, this reality can be devastating. There are planning strategies that can help protect some assets, but these require foresight and often legal expertise. Without advance preparation, families may face heartbreaking choices about how to pay for necessary care.
Understanding what Medicare and Medicaid cover—and what they do not—is critical to developing a realistic plan. This knowledge helps families weigh other options, such as self-funding, insurance solutions, or community-based care models, before a crisis forces them to act. For additional insights into long-term care options, read our blog, Planning for the Unknown: A Realistic Look at Long-Term Care in Retirement.
Legal Safeguards and the Risk of Financial Abuse
Beyond the direct costs of care, dementia introduces another challenge: the risk of financial exploitation. In the early stages of cognitive decline, individuals may still appear capable of managing their finances. Yet, subtle lapses in judgment can make them vulnerable to scams, predatory sales tactics, or even manipulation by people they know.
Establishing powers of attorney, updating wills or trusts, and naming trusted individuals to act on one’s behalf can prevent chaos later. Without these safeguards, families may have no choice but to seek conservatorship or guardianship through the courts—a process that is expensive, time-consuming, and emotionally taxing.
It’s worth noting that financial advisors are mandatory reporters of suspected elder financial abuse. Because advisors monitor transactions and spending patterns, they may spot warning signs before others do. That added layer of oversight can serve as a meaningful safeguard for individuals who may not yet recognize their own vulnerability.
Access to Care and Building a Support Network
Planning for dementia isn’t just about dollars and documents—it’s also about ensuring access to care and having a reliable network to support individuals, so that no one faces the journey alone. Families often face difficult choices between in-home care and residential facilities, each with its own financial implications. In-home care can provide comfort and familiarity, but it can also be inconsistent and vulnerable to risks such as theft or neglect. Residential care offers structure and specialized support, but costs can escalate quickly.
What makes the difference in navigating these options is a strong support network. A spouse, adult children, close friends, or professional advocates can help ensure that decisions align with an individual’s values and needs. Even a small circle of trusted people can ease the burden and protect against isolation, which often compounds the challenges of dementia.
The Human Side of Planning
While numbers and strategies are important, dementia planning is ultimately about people. Families who have lived through it know that what matters most is the sense of care, respect, and compassion surrounding the individual. From a personal perspective, I grew up in a household where my grandmother lived with Alzheimer’s. The financial impact was significant, but the lesson that stayed with me was the power of a supportive network: having people who respected her humanity even as her memory faded.
Without a plan, dementia can make individuals feel like a burden. With thoughtful preparation—legal safeguards, financial structures, and emotional support—families can ensure that their loved one remains at the center of decisions, valued for who they are rather than defined by their diagnosis.
Final Thoughts
Dementia is one of the most challenging realities families may face, but it is not one you have to face unprepared. Financial planning cannot remove the emotional weight, but it can provide stability, clarity, and compassion during uncertain times.
At Curio Wealth, we view planning for dementia as part of a larger conversation about preparing for life’s uncertainties. By addressing the risks head-on—whether through long-term care planning, legal safeguards, or building a support network—we help families navigate not just the numbers, but the human experience of aging. Our role is to walk beside you, ensuring that your resources and your dignity remain protected for whatever the future holds.
Sources:
- Walker, John. “The Costly Future of Dementia Care.” Weekly Checkup, American Action Forum, Jan. 17, 2025. Accessed Aug. 31, 2025. https://www.americanactionforum.org/weekly-checkup/the-costly-future-of-dementia-care/
