The Widower

Dementia Draws Financial Perils

            The mere mention of the word “dementia” triggers two types of fears.

            The first is that you or a loved one will suffer Alzheimer’s or some other debilitating dementia.

            The second is the fear of running out of money.

            I don’t want to dwell on money, and in the first 15 weekly columns I’ve written as “The Widower,” I have yet to do so. But this is that one time I’ll focus on the topic, without revealing too many personal details. Because dementia is a real threat to a family’s finances.

            Back in 2015, two years before I retired from The Janesville Gazette, we met with an elder care attorney. He told us we were well positioned with our separate retirement assets and similar amounts in each. He urged us to contact him immediately if either of us needed nursing home care. At that time, we could protect $119,000 from being absorbed for that care before Medicaid might step up. That amount, which can be protected by the “community spouse”—the one still living at home—has risen to $154,140 this year.

            The spouse at home also could keep $2,800 in monthly income, he told us, besides being able to draw on his or her own retirement assets, which Medicaid can’t tap. The spouse in need of nursing or dementia care must drain his or her assets to $2,000 before Medicaid would kick in.

            The home spouse also can protect the house from Medicaid, as well as one vehicle. Don’t sell the home, our attorney advised us. Having already paid off the mortgage was also to our advantage.

            Given our situation, the spouse at home likely would not live as a pauper.

            In 2013, after making our then-financial advisor aware of my concerns about Cheryl’s memory problems, my wife and I took cognitive tests in applying for long-term care insurance. Unfortunately, Cheryl failed that test. I asked our advisor if we should try another company and he said no, that Cheryl’s results would be shared with other insurers. However, he urged me to insure myself, and I took out a small policy through Genworth.

            Nursing costs, our attorney told us in 2015, were running about $7,000 to $9,000 a month in Rock County and could be on the higher side if that care involved dementia.

            Having recognized the potential financial calamity of Cheryl’s memory issues even before we retired, we pushed as much income into retirement plans as we could while still enjoying a reasonable lifestyle. We took wonderful vacations but had few toys—no snowmobile or ATV, no motorcycle, no camper trailer, no cabin in the woods. I did have a small fishing boat, which I sold, and a lot on the Wisconsin River, which I also sold to get into retirement in 2016, a year earlier than I otherwise might have.

            Selling that lot meant our vision of building a retirement home near Muscoda had vanished. I had bought the property before we got married, so Cheryl agreed that selling it was my decision. With few resources in Richland County to help a dementia patient, it made no sense to build over there. Cheryl didn’t understand why I wanted to sell it, and I didn’t blame it on her dementia, but instead told her I just didn’t think our finances would work to sell our Janesville home and build new over there.

            Because I planned to keep the home, our attorney suggested investing in it to keep it in good shape. Dollars spent on repairs or improvements wouldn’t be drained by dementia care on the way to Medicaid. In the same vein, last year I installed a new boiler furnace and was forced to replace our aging water heater and water softener when both went out at the same time.

            Our financial advisor also advised us to plan our funerals. We chose a cemetery plot at Mount Olivet, bought urns for our ashes and set aside money in CD trusts for funeral expenses. Cheryl didn’t understand why we were doing any of it, but it, too, was designed to protect assets from being drained by health care on the way to Medicaid. Had we not set up those trusts, the expenses for Cheryl’s funeral would have been paid out of the dollars I could have protected from Medicaid.

            As Cheryl’s dementia accelerated in late 2022, I started looking for inpatient facilities. The staff at the Rock County Aging and Disability Resource Center recommended that I check out several places. I toured Oak Park Place, Cedar Crest and Huntington Place in Janesville and Azura Care in Beloit.

            Huntington’s price—just over $5,000—seemed reasonable and $2,000 or $3,000 less than Oak Park’s and Cedar Crest’s. I heard mixed reviews on Huntington’s care, however, and thought highly of Azura Care, even though it, too, was more expensive. In the end, the close proximity of Huntington won me over. Its facilities were just 4 miles from our home, while Azura was 9½. I’m certain that being so close encouraged my almost-daily visits to Cheryl during her year at Huntington.

My wife, Cheryl, was in good spirits when I visited her Feb. 9, 2023, nine days after she entered Huntington Place’s memory care facility. Of course, she didn’t realize the move was permanent. I took this photo so relatives could see what her room looked like.

            Still, in short order, Cheryl’s level of care—and costs—rose, and at the start of this year, Huntington’s prices went up another 10 percent. I was told the price boost was in order to pay the front-line staff more, and with so much employee turnover, increasing pay was a logical step. By the start of this year, Cheryl’s monthly bill had ballooned to more than $6,000.

            Also last year, I started clearing the house. Cheryl had become just short of a hoarder, and I held three rummage sales to raise money and took boxes of trinkets to Carousel Consignments.

            I sold Cheryl’s car, and our attorney also encouraged me to trade in my 2013 Honda CR-V and pay cash for a new car because, again, Medicaid couldn’t hold that against me. I wondered how tapping retirement assets—rather than paying interest on a loan—might affect our income tax situation. Our tax advisor said it made sense and to do so before Cheryl passed so we were still married filing jointly; being single will now alter my income tax picture dramatically. I loved my Honda, so I bought a new CR-V but opted for a hybrid to save on gas expenses.

            When I was preparing our income tax returns this spring, I calculated that our combined out-of-pocket costs for medical care topped $65,000 last year. With the price boosts at Huntington, I projected that those costs would balloon to more than $80,000 had Cheryl lived throughout this year, and sometime next year she would be applying for Medicaid.

            The kicker, however, is that while Huntington accepts Medicaid patients, it only has a handful of slots. I was informed when placing Cheryl there that the longer we paid out of pocket, the better the odds that she would get one of those slots.

            Not that I wanted to drain our assets that much. When she died Feb. 25, it all became a moot point.

            Since then, I’ve met with our financial advisor several times. The good news is that I seemingly have enough assets that, at age 67, I don’t have to go back to work. The bad news is the rapid inflation rate.

            I continue to use a budget, moderate my spending and try to live within my means. Maintaining a household, walking Molly, getting exercise and trying to enjoy retirement fills my days. Eight years after walking out of the Gazette, I dread the thought of looking for another job.