It sounds somewhat crass to say, but besides being a great destroyer of health, dementia can also destroy many a grand retirement plan. The fact of the matter is, after the age of 60, the risk of suffering from dementia increases. While only about 5 percent of people aged 65 to 74 suffer from Alzheimer's, that percentage skyrockets to nearly 50 percent after age 85, according to the Alzheimer's Disease Education & Referral Center (ADEAR). That means that while Alzheimer's now afflicts about 4.5 million people, that number is expected to balloon to nearly 8 million, or about one in 10 of the baby boomer generation, according to the National Institutes of Health. The take-away for your practice: Your pre-retiree clients must be aware that today's 65-year olds have life expectancies of close to 90.
Alzheimer's may be the furthest thing from their minds, at least for now. And the odds of getting it are still low at early ages. But, that said, you, as a financial advisor, would be wise to bring it to their attention, if only as an input into one of the many real contingencies they may face. Alzheimer's has become a significant scourge of our overall health care industry. The longevity of the disease — an average six to eight years, but sometimes as long as 20 years — makes it almost uniquely costly among terminal conditions. Some experts estimate that half of all nursing home beds are filled with patients suffering from some form of dementia.
It's an especially frightening malady because it robs seniors of their independence. What makes discussing this issue so delicate is that new retirees often mirror the sunny optimism promoted on TV commercials and elsewhere: That good health will allow them to enjoy global travel, indulge their hobbies and even take on new vocations. Advisors are undoubtedly aware of this concept of “cyclic” retirement — a continual process of leisure, education and work — as chronicled by aging guru Ken Dychtwald in his recently published book, The Power Years (Wiley, 2005).
Where Is My Car?
Alzheimer's begins with harmless, even humorous, memory lapses, such as forgetting where you parked your car or mysteriously ending up in a different town than your own. But its impact gradually grabs hold of the patient, drawing him into a cycle of increasingly distressing symptoms, including the loss of reasoning, coherent speech and the ability to read or write. Eventually, the patient may experience great anxiety with ordinary life, become aggressive or simply wander away from home.
These later symptoms create special health care challenges, and many assisted-living facilities will not accept Alzheimer's patients because of both the high level of care needed and the progression of more advanced symptoms. Complicating the choice of Alzheimer's care is the phenomenon that its patients may not currently require seemingly invasive or restrictive measures.
However, as the disease progresses — sometimes with unpredictable speed — issues of safety and security change dramatically. Dedicated Alzheimer's facilities are limited, and families are often taken aback at the ward-like security approach employed by these operations. To offset the deficiencies or harshness of available care facilities, many affluent families engage supplemental care, significantly increasing overall costs and, most certainly, incremental to any expenses covered by insurance.
The real toll of Alzheimer's is borne by the family. While early stage Alzheimer's can be frightening to the patient, he eventually becomes unable to understand the world around him and can be largely unaffected by his surroundings and level of care. To the family, however, Alzheimer's can be a seemingly endless trail of heartbreak. Since the family provides the majority of eldercare in the U.S. (and the world), living with an Alzheimer's patient can be an especially difficult and emotionally draining experience. Former President Ronald Reagan's 10-year battle with the disease inspired new awareness of Alzheimer's and the impact on the family. Having relinquished the presidency in 1989, Reagan began experiencing noticeable memory loss in 1993. In 1994 he was diagnosed with Alzheimer's.
Financially well off, the Reagans had hoped to live most of their golden years at their ranch in Santa Barbara, Calif., but instead were confined to their Bel Air home for much of the time until Reagan passed away in June 2004. Nancy Reagan provided primary care for the entire decade of his suffering, seldom leaving his side. Daughter Maureen also provided regular care, and died before her father.
The burden on the family can be profound and is life altering for the survivors. Witness the extraordinary resignation of Supreme Court Justice Sandra Day O'Connor, who announced that she will leave the high bench at 75 to care for her Alzheimer's-stricken husband, John.
What You Should Do for Your Clients
Pre-screen for Risk
While the causes of Alzheimer's are not fully understood, it appears to have hereditary links. Your clients should be queried about their family history (for more on how to query, gingerly, about family histories, see “Playing Doctor,” Registered Rep., July 2005), and the potential for dementia — even if only at a later stage.
Help Them Prepare for the Potential
Ask clients, “What would you do if you were struck by Alzheimer's?” Listen carefully to the response. Terminal cancer is pretty straightforward, and heart disease is typically a quick ending. But dementia carries with it a log of emotional implications. Listen for which member of the family is most concerned — and whether it is about the changes to their life or the impact on the kids. This person is the Enforcer. The Enforcer will help the family stick with whatever plan you agree on. This is your key to maintaining focus on the plan you create for your clients.
Get a “Backup” Client
Another issue will confront you at some point, which is the inability of your client to make coherent decisions. A substitute should be specified. This maybe an ideal opportunity to develop a relationship with the next generation, a perennial challenge for advisors.
Create Advance Directives
Anyone who has watched an Alzheimer's patient progress to advanced stages has a new perspective on the value of advance directives. Test for sensitivity to the topic with clients, especially new clients, and query them for their personal experiences and opinions. (For more information about advance directives, again see the “Playing Doctor” column.)
Be especially mindful of advance medical directives, such as the role of hydration, which can prolong the agony of Alzheimer's for both patient and family. (By the way, a top wealth advisor we know used the Terry Schiavo story to schedule 80 appointments with existing and prospective affluent clients. He used advance directives as the first step toward complete estate plans. Now, that's a strong business.)
Investigate and Arrange Senior Housing Options
Alzheimer's facilities are limited and often shocking to families who don't think their relatives need such restrictive and seemingly harsh care. Adding to the angst are the more advanced patients lined up in rows of wheelchairs babbling incoherently or simply staring out in space. Supplementing care is an option if you can find a facility that will accept the Alzheimer's patient, and many will arrange for it and bill you. Home care for Alzheimer's is especially tricky and dangerous without full-time care, because the symptoms can include aggression. Housing issues need to be discussed in great detail — even to the point of selecting and financing a facility.
What About Long-Term Care Insurance?
Most clients couldn't buy enough to make much of a difference without breaking their savings and, beware, long-term care companies screen carefully for Alzheimer's and a family history of the disease.
Prepare for Referrals
The very fact that you have been upfront with clients and prospects about one of their most profound retirement-age fears may stimulate referrals alone. And while not everyone will want to discuss the issue, your forthrightness will become known. Consider creating client events with an expert and a senior housing specialist. You may be surprised how many people are thinking about what you're talking about.
Support groups for caregivers and family of Alzheimer's patients are readily available. alzheimers.org is a good place to start.
Writer's BIO: Stephen D. Gresham is executive vice president of Phoenix Investment Partners.
Glen E. Gresham, M.D., is professor emeritus of rehabilitation medicine at the University at Buffalo, The State University of New York.