How Dementia Drains the Savings of Older Adults and Their Families


Dementia is a devastating condition that affects millions of older adults and their families. It not only impairs their cognitive abilities, memory, and behavior, but also imposes a heavy financial burden on them. A new study reveals how much out-of-pocket expenses people with dementia face, and how they differ by care setting and dementia status.

Out-of-Pocket Expenses for Dementia Care

The study, published in the Journal of the American Medical Directors Association, analyzed data from a national sample of more than 4,500 adults aged 70 and older, who were followed for up to 10 years. The researchers compared the out-of-pocket expenses for long-term care, health care, and other services by dementia status and care setting. They found that:

  • The median adult with dementia in residential facilities such as assisted living centers spent 97% of their monthly income on long-term care. People with dementia in nursing homes spent nearly 83% of their monthly income on long-term care.
  • The average monthly out-of-pocket facility payment was $3,090 for those in non-nursing home residential care and $3,849 for people with dementia in nursing homes. For older adults without dementia, those figures were $2,801 and $2,176, respectively.
  • More than three-quarters of people with dementia hired helpers to assist with activities of daily living and other tasks, spending an average of $1,000 per month. Only 43% of older adults without dementia hired helpers, spending an average of $600 per month.
  • People with dementia also spent more on health care services, such as hospitalizations, physician visits, and prescription drugs, than those without dementia.

The Challenges of Funding Long-Term Care

The study highlights the financial challenges that people with dementia and their families face, as they often have to pay for long-term care out of their own pockets. Medicare, the federal health insurance program for older adults, does not cover most long-term care services. Medicaid, the federal-state program for low-income people, does cover long-term care, but only for those who meet strict eligibility criteria, such as having very low income and assets.

Dementia Drains

“Because dementia is such an expensive illness, it really is in a category of its own when we start to think about funding for long-term care,” said Jalayne Arias, associate professor in the GSU School of Public Health and senior author of the study. “Our study shows that if you compare people with dementia to their age-matched counterparts, they experience costs that are untenable to manage.”

The researchers noted that their findings can inform policy in an era in which the percentage of older Americans is expected to rise significantly in the coming years. They suggested that more public and private options for long-term care insurance are needed, as well as more support for family caregivers, who often bear the physical, emotional, and financial costs of caring for their loved ones with dementia.

The Impact of Dementia on Society

Dementia is a major public health issue that affects not only individuals and families, but also society as a whole. According to the Alzheimer’s Association, an estimated 6.2 million Americans aged 65 and older are living with Alzheimer’s disease, the most common cause of dementia, in 2024. This number is projected to rise to 12.7 million by 2050. The total cost of care for Alzheimer’s and other dementias in the U.S. is estimated to be $355 billion in 2024, and could reach $1.1 trillion by 2050.

Dementia also has a global impact, as it is one of the leading causes of disability and dependency among older people worldwide. According to the World Health Organization, there are about 50 million people living with dementia globally, and this number is expected to triple by 2050. The annual global cost of dementia is estimated to be $1.3 trillion, and could increase to $2.8 trillion by 2030.

Dementia is a complex and multifaceted condition that requires a comprehensive and coordinated response from various sectors and stakeholders. The study authors called for more research and innovation to improve the diagnosis, treatment, and prevention of dementia, as well as to enhance the quality of life and well-being of people with dementia and their caregivers.


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