Financial Planning and Paying for Care

How to plan for the costs of dementia care—typical care costs, organizing finances, protecting against money problems and fraud, and the personal, government and private ways families pay for long-term care.

Last reviewed: October 2026

This page is general information, not financial or legal advice. Programs and rules change and vary by state. Talk with an elder-law attorney or a qualified financial professional about your situation.

Dementia is usually a long illness, and care needs grow over time. Paying for that care is one of the biggest worries families face. The Alzheimer's Association advises putting financial plans in place as soon as possible after a diagnosis, while the person can still understand the issues and share their wishes.

What care can cost

Costs depend on where you live and the kind of help needed. The Alzheimer's Association, citing Genworth's national median costs for 2025, lists:

Type of care	National median cost (2025)
Non-medical home health aide	$35 an hour (about $1,400 a week for 40 hours)
Adult day services	$95 a day
Assisted living	$6,200 a month ($74,400 a year)
Nursing home, semi-private room	$9,581 a month ($114,975 a year)
Nursing home, private room	$10,798 a month ($129,575 a year)

Other costs to plan for, according to the Alzheimer's Association, include doctor visits and treatment, prescription drugs, medical equipment, personal care supplies, and home safety changes or services for someone who wanders.

Step 1: Gather and organize documents

Put financial papers in one place and review them carefully. The Alzheimer's Association suggests including:

Bank and brokerage account information
Deeds, mortgage papers and ownership statements
Insurance policies (health, life, long-term care)
Pension and retirement benefit summaries, including VA benefits
Social Security payment information
Monthly and outstanding bills
Stock and bond certificates, rental income paperwork
Wills and powers of attorney

This is also a good time to notice which documents are missing, such as a durable power of attorney for finances. See Legal Planning.

Step 2: Hold a family meeting

Bring family together to talk about care wishes, who can help with what, and whether finances might be pooled. Ongoing money tasks to assign include paying bills, handling benefit claims, investment decisions and tax returns.

Step 3: Protect against money problems

The National Institute on Aging (NIA) notes that money problems may be one of the first noticeable signs of dementia. Watch for unopened or unpaid bills, lots of new credit card purchases, unexpected merchandise in the home, or money missing from accounts.

Steps the NIA suggests, while respecting the person's independence:

Set up automatic bill payments for utilities, rent or mortgage and other regular bills.
Help make a simple monthly budget.
Limit risk: keep small amounts of cash on hand, lower credit card limits and cancel unneeded cards.
Check statements monthly—a family member or legal representative should review accounts and step in if there are serious concerns.
Arrange legal authority early, such as a durable power of attorney for finances, while the person can still understand and agree.

Guard against scams and exploitation

The NIA warns that people with dementia may be targets of financial abuse or fraud, by strangers or even by "friends" or family. Warning signs include signatures that don't look right, a will changed without permission, missing valuables, or legal papers signed without understanding them. Helpful steps include adding the person's number to the National Do Not Call Registry and setting up fraud alerts. To report suspected fraud, the NIA lists the National Elder Fraud Hotline: 833-372-8311. See Protecting Against Scams.

How families pay for long-term care

The NIA explains that most health and disability insurance offers limited, if any, long-term care benefits, so families usually combine several sources.

Personal funds

Many people pay out of pocket with savings, pensions, retirement accounts, investment income or the sale of a home. The NIA notes that assisted living is almost always paid for out of pocket, although Medicaid may cover some costs in some states.

Medicare

Medicare helps pay for hospital stays, doctor visits, some home health care, hospice and preventive care—but, as the NIA points out, it does not cover assisted living or long-term care. See Medicare, Medicaid and Dementia Care.

Medicaid

Medicaid, a joint federal-state program for people with limited income who meet other eligibility rules, covers medical care and some types of long-term care. Eligibility and services vary by state. Many state Medicaid programs also offer home- and community-based services, and some pay family caregivers. Medicaid rules are complex, which is one reason families often consult an elder-law attorney.

Other government programs

The NIA and the Alzheimer's Association list:

PACE (Program of All-Inclusive Care for the Elderly), a Medicare-Medicaid program in some areas that helps people who would otherwise need a nursing home stay at home
Veterans' benefits, which may cover long-term care for some veterans (see Resources for Veterans)
Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI); Social Security's "compassionate allowances" can speed disability claims for early-onset Alzheimer's
Tax deductions and credits, such as the Household and Dependent Care Credit
State Health Insurance Assistance Programs (SHIP) for free Medicare and Medicaid counseling (877-839-2675)

Private options

According to the NIA, these may include:

Long-term care insurance. The Alzheimer's Association notes it is usually not available to buy once symptoms appear, so review any existing policy carefully.
Reverse mortgages (for homeowners 62 and older), which have costs and risks—talk to an expert first.
Life insurance with an "accelerated death benefit," or selling a policy
Annuities and trusts, which can have tax effects

Community help

Low- or no-cost services—respite care, adult day programs, support groups, transportation and meal delivery—can stretch a budget. See Respite Care.

If you're managing someone else's money

Being named a power of attorney, trustee, guardian or representative payee comes with legal duties. The Consumer Financial Protection Bureau offers free, plain-language "Managing Someone Else's Money" guides for each of these roles.

Getting professional help

The Alzheimer's Association recommends advisors who understand elder care and long-term care planning. Check credentials, experience and specialty. Helpful professionals may include elder-law attorneys, financial planners, accountants and tax preparers.

Where to get help

Eldercare Locator: 800-677-1116
Alzheimer's Association 24/7 Helpline: 800-272-3900
National Academy of Elder Law Attorneys directory (naela.org)
BenefitsCheckUp from the National Council on Aging, to search for benefit programs

Before making major decisions—like moving assets, applying for Medicaid or buying a financial product—talk with an elder-law attorney or trusted financial professional. See also Choosing Memory Care or a Nursing Home.

Sources

Not medical advice. This article is general information, not a diagnosis or treatment plan for any individual. Talk with a doctor about your situation.

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We may answer common questions in future updates (we won't share your name). We can't give personal medical advice; for urgent help call the Alzheimer's Association Helpline at 800-272-3900.

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