Tuesday, August 09, 2011

a Hidden Cost of Alzheimer's: almost a $million per family

Here is a cost of Alzheimer's I've never heard discussed:  loss of Social Security income.
I'm going to completely make up figures here.
My dad retired, literally, the earliest he could, meaning he got the minimum SS income.  Let's say he got $1000 a month, but if he had stayed until he was 65, he would have gotten $2000 a month.  And assume he lived a normal lifespan to 80 years.  So from age 65 to 80 (15 years) he made $24,000 a year ($360,000).  Then when he died at age 80, my mom would then get that money for the rest of her life--she's from a long-lived clan, so let's say she made it to 95 (her mom's still kicking at 93 and her grandma made it to 99).  That's 20 years (she's 5 years younger than my dad) at $24,000 or $480,000 in SS income.  Not counting what she made for her own SS income from age 65 to 75.
Let's say my mom would have retired at the maximum of 65 and gotten $1800 a month.  That's $216,000 for those 10 years, until my dad died.  So total retirement income for my parents=$576,000 from age 65 to death.  Half a million, not bad.
But that didn't happen.  My dad retired early, to the minimum amount (which I invented as $1000 a month).  So not only did he lose his job's income of several times that amount from age 62 to age 65, but he then lost $1000 every month to early retirement (due to Alzheimer's.)  Let's say he made $3000 a month at his job.  So $108,000 in real income from selling cars, evaporated.   From age 65 on, $12,000 a year of SS, not coming in.
Then we get to my mom.  She also had to retire early (age 60), to take care of my dad.  So instead of the $1800 a month she should have gotten, she only got $900.  Let's say she made $2000/month at her job.  She lost 5 years of that real income ($120,000).   Then my dad died at age 67 and my mom started to get his SS, $1000 a month rather than the $2000 he would have gotten if he just retired 2 years earlier.
Let's summarize the math.
Mom's early retirement, lost income through not working
$120,000 (5 years x 12 months x $2000/month)
Dad's early retirement, lost income through not working
$216,000 (3 years x 12 months x $3000/month)
Loss of maximum SS for my dad, ages 65-67
$48,000 (2 years x 12 months x $2000/month)
Loss of maximum SS for my mom, age 65-95
$360,000 (30 years x 12 months x$1000/month)
total: $744,000.
So if my mom lives to be 95, she will have lost three quarters of a million dollars in income because my dad had early-onset Alzheimer's.
I invented these figures, but they aren't very inaccurate. I would say that for an average family with one person developing Early Onset Alzheimer's, this is probably close to reality.
Has no one else thought of this?  It's really depressing.  And it makes me really angry.  My parents could have had an enjoyable retirement with almost a million dollars.  Now my mom struggles by on the absolutely minimum through no fault of her own--and because I don't work, I can't help her out financially.
(image source)


Janett Brown said...

Some people don't think about their retirement thoroughly. And they take important steps before thinking about it twice or asking an expert.
May God be with you and your mom

GBP })i({ said...

The absolute insensitivity and rudeness of the above person's comment prompted me to write an entire post as a response: