The lifetime cost of care for someone with Alzheimer's is over $400,000. Here's how you can prepare for the expense.

By Jessica Hall

'This will be a bigger and bigger concern as the population ages'

The lifetime risk of dementia after age 55 is about 42%, according to a 2025 study published in the journal Nature Medicine.

Alzheimer's disease is not just devastating for your health. It can also destroy your family's wealth. Costs related to Alzheimer's care can be astronomical - and for some families, surprising - but there are ways to prepare.

The lifetime total cost of care for someone living with Alzheimer's, including out-of-pocket expenses and Medicare and Medicaid expenditures, is estimated at about $417,000 - more than twice the estimated lifetime-care costs for people without the disease, according to the Alzheimer's Association. This total includes unpaid caregiving, but if a person needs care in a nursing home, the costs quickly skyrocket to more than $100,000 a year.

For women, it's even worse: Their total lifetime costs may be three times higher than for men with Alzheimer's, because women tend to live with the disease for longer and to spend more time in a nursing home, the group said.

"Alzheimer's and dementia affect so many of us, whether it's personally or someone you know or from a caregiving perspective. Financial professionals are getting questions on this all the time. It has to be looked at from a cost and savings perspective, and in ways to push it off as long as possible through brain health," said Michael Lynch, managing director of applied insights at Hartford Funds.

The lifetime risk of dementia after age 55 is about 42%, according to a 2025 study published in the journal Nature Medicine. Around 1 million adults in the U.S. are projected to develop dementia each year by 2060, compared with around 514,000 in 2020, the study found.

"This will be a bigger and bigger concern as the population ages," Lynch said. "The good news is that people are living longer with certain diseases, and the bad news is the same - people are living longer with certain diseases."

Dementia describes symptoms that impact cognitive abilities, while Alzheimer's disease is a specific and common type of dementia. Alzheimer's has no cure.

Insurance will typically cover medical costs related to Alzheimer's, such as doctors' visits, prescriptions, exams and medical tests, but it doesn't cover assisted living, memory care or personal aides for assistance with daily living.

An estimated 7.4 million Americans age 65 and older are currently living with Alzheimer's, according to the Alzheimer's Association. The percentage of people with Alzheimer's increases with age: 5.2% of people ages 65 to 74 have the disease, while 35.8% of those ages 85 and older do.

"Dementia planning was not a big issue in the past because people were dying at younger ages, before the age of Alzheimer's risk," said Steven Conners, founder and president of Conners Wealth Management in Scottsdale, Ariz. "It's not something we had to deal with 30, 40 years ago. But today, it's something people need to be aware of. It's more common, as we'll all be living longer. The potential for chronic illness and critical care need to be factored in to your planning."

Health concerns and their financial ramifications are coming to the fore as baby boomers - those born between 1946 and 1964 - begin turning 80 this year, and as more than 11,000 people a day turn 65 in a demographic bubble known as "Peak 65." Financial security remains a concern for older adults, with Social Security currently facing insolvency in 2032, at which point benefits will be cut by 24% unless Congress acts to shore up the program's finances.

The total costs in 2026 for all individuals living with Alzheimer's or other types of dementia are estimated at $409 billion, not including the value of informal, unpaid care from family and friends, according to the Alzheimer's Association.

Medicare and Medicaid are expected to cover $263 billion, or 64%, of the total healthcare and long-term-care payments for people living with Alzheimer's or other dementias. Out-of-pocket spending is expected to be $103 billion, or 25% of total payments, according to the Alzheimer's Association.

Medicare does not cover long-term-care costs such as at-home, assisted-living or nursing-home care.

Meanwhile, healthcare costs are escalating. An in-home, nonmedical caregiver costs more than $80,000 a year, assuming 44 hours of care a week, while the median cost of assisted living is $74,400 a year, according to CareScout. The national median rate for a private room at a nursing home now tops $129,000 a year.

Conners said hybrid long-term-care policies may be an answer for some clients who are now in their 40s, 50s and 60s to help protect against future care costs. Such policies avoid the use-it-or-lose it penalties of traditional long-term-care policies, he said. A hybrid plan provides long-term-care payouts if a person ends up needing care, and if they don't, it provides a tax-free life-insurance benefit to beneficiaries when the policyholder dies.

For clients with liquid assets of $1.5 million or more, Conners generally suggests directing 5% to 10% toward a policy such as a hybrid life-insurance policy that would cover the cost of care later in life. But not every client can afford that or is healthy enough to qualify for such a policy, he added.

"We have to ask hard questions, such as, have we thought of carving off money for a potential health challenge?" Lynch said. "The days of retirement being a finite date on a calendar and going off on a sailboat or sitting on the beach are over. The new job is managing effectively our retirement portfolios that have to work for longer."

Healthcare costs also have been rising faster than overall inflation.

"Healthcare needs to be its own category in financial planning," said C. Alexander Dann, senior vice president and financial adviser with Novare Capital Management in Charlotte, N.C. "Healthcare inflation has had a significantly higher inflation rate than other costs such as property taxes or a mortgage, which is fixed."

Dann said people should be "super, super conservative" in their planning. "Overestimate what healthcare costs and long-term care facilities will cost in the future. The biggest drag on retirement nest eggs in your 80s and 90s is care," he said. "It's all about planning for the unexpected so that you're not putting out fires in your later years."

However, it can be difficult to address healthcare crises with clients, since few people want to talk about disease or death, he added.

"Even before you get into the numbers, do your estate planning up front," Dann said. Key estate-planning documents include a will and power of attorney for financial and medical decisions in case you become incapacitated.

"It's not a topic most clients are eager to bring up. But we have to address the fact that it's expensive and can't wait until a diagnosis to deal with it," Dann said.

-Jessica Hall

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

05-19-26 1000ET