Learn

Personal Resource Center
Back

What Dementia Care Really Costs and How to Prepare

June marks Alzheimer’s & Brain Awareness Month and Elder Abuse Awareness Month, promoting brain health and support for those affected by dementia, while also focusing on preventing abuse, neglect and exploitation of older adults. Pinnacle + Synovus has spotlighted with Carefull, a financial safety platform, that offers enhanced protection for our clients and loved ones.

For many people, one of the biggest fears about getting older is not being able to afford the care they might need, and few conditions have a heavier long-term financial burden than dementia.

You’ve probably heard “Alzheimer’s” used as a shorthand for memory loss in older adults. But Alzheimer's is just the most common type of dementia, accounting for 60% to 80% of dementia cases.1 Other types of dementia include vascular dementia, Lewy body dementia and frontotemporal dementia.

Researchers estimate Americans have a lifetime risk of dementia of 42% after age 55.2


Why is dementia care so expensive?

One challenge of dementia is its duration. Here are the average life expectancies after diagnosis for people with different types of dementia:3

  • Alzheimer’s: 8 to 10 years
  • Vascular dementia: 5 years
  • Frontotemporal dementia: 6 to 8 years
  • Lewy body dementia: 6 years

These are averages, but some people live with dementia for 20 years or more.4

Because the care needs of someone with dementia grow over time, the cost of care does too. Early on, many people live independently with some family support. But as the disease progresses, families may need to supplement or eventually replace informal support with non-medical in-home care. That's paid help with bathing, dressing, eating, giving medications and other tasks that don't require a nurse or physician. It's distinct from medical home health services, which Medicare typically covers.5

When in-home care is no longer enough, families usually consider assisted living or a specialized memory care unit located within an assisted living facility before turning to a nursing home for the highest level of care.

Research from BMJ Group found that one-third of people with dementia move to a nursing home within three years of diagnosis, and more than half move within five years.6 That research specifically looked at nursing home placement, but many people move to assisted living or memory care units along the way.

For people with dementia, the average stay in any kind of institutionalized care facility is five years.7

When you include earlier non-medical in-home care and assisted living, a decade or more of caregiving is a realistic financial planning horizon


What Does Dementia Care Actually Cost?

Dementia care costs more than many families anticipate.

Current national median monthly costs include:

Consider an average case, where a person diagnosed at 75 spends three years in assisted living before transitioning to a nursing home for two years. The total care costs could reasonably reach $400,000 to $600,000.

A longer journey, beginning at 65 with in-home support followed by years in memory care, can easily exceed $1 million.


How Do Families Pay for Dementia Care?

There are three financial pathways when a dementia diagnosis enters the picture.


Paying Out of Pocket

Drawing on savings, retirement accounts, or the sale of a home gives you the most flexibility in choosing care. But the financial toll can be severe.

Clock icon
Dementia care can deplete wealth built over a lifetime in a matter of years, leaving little to pass on to heirs.

Wealth built over a lifetime may be depleted in a few years, leaving little for a surviving spouse or children.


Long-Term Care Insurance

Long-term care insurance covers extended care costs once you can no longer perform activities of daily living independently.

Some policies pay a daily or monthly benefit toward home care, assisted living, memory care, or a nursing home for a set period, usually two to five years.10

Other policies pay benefits for life up to policy limits, but cap benefits per day.11 For example, your policy might have a $150 limit per day and a $500,000 lifetime limit.

Policy provisions vary widely, so it's a good idea to review the terms carefully with your financial advisor before you buy.

Long-term care insurance shifts the financial risk to an insurer and protects your family’s assets. However, you have to buy a policy before you need it, ideally before age 60.12 Once a dementia diagnosis is in place, buying a policy may be extremely difficult or prohibitively expensive.


Medicaid

For families who have exhausted their savings, Medicaid is the payer of last resort.

To qualify, your income must generally fall below $2,982 per month (individual) or $5,964 (married couple), with minimal assets.13

If your income exceeds that limit, you may still have options. Some states allow you to use a Qualified Income Trust that lets you redirect the excess income into a trust, removing it from Medicaid's calculation.14

Upon your death, the Medicaid agency receives the trust funds, up to the amount it paid for your long-term care.

Other states handle this through a medically needy program.14 You pay the difference between your income and the state's medical income standard on care costs, and Medicaid covers the remaining costs for that period.

Once eligible, Medicaid covers 100% of nursing home costs. But coverage for other settings is limited, and not all nursing homes accept Medicaid. Those that do may have limited availability.

For married couples, the spend-down can leave a healthy spouse financially depleted. Medicaid’s spousal impoverishment rules offer some protection, but they have limits.15


The Best Time to Plan Is Before You Need To

A dementia diagnosis is never easy to think about, but the earlier you have honest conversations with your family and your financial advisor about long-term care, the more options you’ll have when the time comes.

A financial advisor can help you think through what makes sense for your situation, well before a diagnosis makes the decision urgent.

Important disclosure information

This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

  1. Alzheimer’s Association, “What is Dementia?” accessed May 12, 2026. Back
  2. Brian Doctrow, Ph.D., "Risk and future burden of dementia in the United States," National Institutes of Health, published February 18, 2025. Accessed May 12, 2026. Back
  3. Alzheimer's Society, "The later stage of dementia," accessed May 12, 2026. Back
  4. Mayo Clinic, “Alzheimer’s stages: How the disease progresses,” published May 9, 2025. Accessed May 12, 2026. Back
  5. Medicare.gov, "Home health services," accessed May 12, 2026 Back
  6. BMG Group, “Study sheds more light on life expectancy after a dementia diagnosis,” published September 1, 2025. Accessed May 12, 2026. Back
  7. Karlijn J. Joling, Olin Janssen, Anneke L. Francke, Robert A. Verheij, Birgit I. Lissenberg-Witte, Pieter-Jelle Visser, and Hein P.J. van Hout, “Time from diagnosis to institutionalization and death in people with dementia,” Alzheimer’s & Dementia, published February 18, 2020. Accessed May 12, 2026. Back
  8. CareScout, “Calculate the cost of long-term care near you,” accessed May 12, 2026. Back
  9. Taylor Shuman and Dr. Abby Altman, “Memory Care Costs in 2026,” SeniorLiving.org, published April 14, 2026. Accessed May 12, 2026. Back
  10. American Council of Life Insurers, “Long-Term Care Insurance: A Plan for the Road Ahead,” accessed May 12, 2026. Back
  11. Insurance Information Institute, "What features of long-term care policies should I focus on?" accessed April 12, 2026. Back
  12. National Council on Aging, “How Much Does Long-Term Care Insurance Cost and Is It Worth It?” published February 13, 2025. Accessed May 12, 2026. Back
  13. Jen Teague, “How Will Medicaid Cover Long-Term Care If I’m Over Income?” National Council on Aging, published March 18, 2026. Accessed May 12, 2026. Back
  14. American Council on Aging, "How Qualified Income Trusts (Miller Trusts) Help Medicaid Applicants Become Eligible for Long-Term Care," updated December 31, 2025. Accessed May 12, 2026. Back
  15. Medicaid.gov, “Spousal Impoverishment,” accessed May 12, 2026. Back