I’m truly sorry to hear about your Alzheimer’s diagnosis—it’s an overwhelming curveball, and receiving an inheritance on top of that can feel paralyzing. You’re taking a brave step by seeking guidance, and that’s a strong foundation. Please know I’m not a financial advisor, and this isn’t personalized advice; it’s general information based on reliable resources. The most important move right now is to consult professionals who can tailor a plan to your exact situation, health, and goals. Let’s break this down step by step to help you get started.
Step 1: Assemble Your Support Team Immediately
With Alzheimer’s, cognitive changes can progress, so acting while you can make decisions is crucial. Start here:
- Financial planner or advisor specializing in elder care: Look for a fee-only certified financial planner (CFP) via the Financial Planning Association (napfa.org) or XY Planning Network, who understands dementia-related needs. They can help assess your full financial picture (income, debts, other assets) and model scenarios for care costs.
- Elder law attorney: For estate planning, powers of attorney (POA), and asset protection. Search through the National Academy of Elder Law Attorneys (naela.org). This is key to avoid future disputes or Medicaid spend-down issues if care costs escalate.
- Your doctor or neurologist: Involve them for medical insights that inform financial choices, like timing for long-term care insurance.
- Trusted family member or friend: Designate one as your “trusted contact” for banks and accounts to monitor for fraud—a common risk with dementia.
Aim to meet with at least one pro within the next week. Many offer free initial consultations, and the Alzheimer’s Association (alz.org) has a 24/7 helpline (800-272-3900) to connect you with local experts.
Step 2: Get Your Legal and Basic Financial House in Order
Before touching investments, secure these foundations to protect your $400K:
- Review and organize documents: Gather bank statements, wills, insurance policies, debts, and assets. Create a simple inventory—apps like Everplans or a basic spreadsheet work.
- Set up powers of attorney: A durable financial POA lets a trusted person handle money matters if needed; a healthcare proxy covers medical decisions. Do this now while you’re able.
- Simplify banking: Consolidate accounts, set up automatic bill pay, and enable alerts for transactions. Avoid new credit cards or complex setups.
- Address debts: Pay off high-interest ones (like credit cards >7%) first to free up cash flow.
- Consider long-term care (LTC) insurance: If you’re in early stages and eligible, this could stretch your funds. Premiums average $2,000–$3,000/year for someone in their 60s, but shop via eHealthInsurance or an independent broker.
These steps safeguard your inheritance from risks like scams or mismanagement, which affect up to 1 in 10 people with dementia.
Step 3: Realistic View of Costs and Needs
Alzheimer’s care can be expensive, so your $400K is a lifeline but likely not a lifetime solution. Here’s a snapshot:
- Home care: $34/hour for non-medical aides, or ~$70,000/year for 40 hours/week.
- Memory care facilities: $7,500–$8,400/month ($90,000–$100,000/year) on average, potentially $180,000–$270,000 over 2–3 years.
- Lifetime total: Around $405,000 per person, with 70% paid out-of-pocket by families.
Factor in your age, stage of diagnosis, location (costs are 20–30% higher in coastal states), and lifestyle. A pro can run projections—e.g., if care starts in 5 years, inflation could bump annual costs to $110,000+ by 2031.
Step 4: Investment Approach – Prioritize Safety and Income
Your goal isn’t aggressive growth; it’s preserving principal for care while generating modest, reliable income (aim for 3–5% yield with low volatility). With $400K, think conservative and liquid—easy to access without penalties. Here’s a sample allocation (adjust with an advisor):
- Emergency fund (20–30%, or $80K–$120K): High-yield savings account (HYSA) at 4–5% APY (e.g., via Ally or Marcus by Goldman Sachs). Covers 6–12 months of basics like housing and meds.
- Short-term fixed income (30–40%, $120K–$160K): Certificates of Deposit (CDs) or U.S. Treasury bonds (via TreasuryDirect.gov). Current 1–5 year CDs yield 4–4.5%; Treasuries are tax-advantaged and ultra-safe. Ladder them (e.g., half in 1-year, half in 3-year) for flexibility.
- Annuities for steady income (20–30%, $80K–$120K): A fixed immediate annuity could pay $1,500–$2,000/month for life, starting now. Shop via ImmediateAnnuities.com; they’re low-risk but lock in funds, so only if you don’t need lump sums soon.
- Diversified conservative portfolio (10–20%, $40K–$80K): Low-cost index funds or ETFs focused on bonds/dividend aristocrats (e.g., Vanguard’s BND for bonds or VIG for stable stocks). Use a robo-advisor like Betterment’s “Socially Responsible” or “Income” portfolio for hands-off management.
| Allocation Example | Amount | Purpose | Expected Yield (2026 est.) | Risk Level |
|---|---|---|---|---|
| HYSA/Emergency | $100K | Immediate access | 4.5% | Very Low |
| CDs/Treasuries | $150K | Short-term preservation | 4–4.5% | Low |
| Fixed Annuity | $100K | Monthly income | 5–6% (payout rate) | Low |
| Bond ETF | $50K | Modest growth | 3–4% | Low-Moderate |
Total portfolio yield: ~4%, generating ~$16,000/year initially—enough to supplement Social Security or pensions without depleting principal quickly. Avoid stocks, crypto, or real estate flips; volatility could force sales at lows during care needs. Review annually or with life changes.
Step 5: Broader Planning and Support
- Medicaid/Medicare: Maximize benefits—Medicare covers some diagnostics but not long-term care; Medicaid can after asset spend-down (protect via trusts).
- Taxes: Inheritance over $13.61M (2026 threshold) avoids federal estate tax, but consult a CPA for income tax on interest/dividends.
- Emotional side: Join a support group via AlzConnected.org for shared stories on finances.
- Family involvement: Discuss openly—perhaps gift modest amounts to heirs now, tax-free up to $18K/person/year.
You’re not alone in this; millions navigate it with grace and smart planning. Start with that helpline call today—it’ll clarify the fog. If you share more details (like your age or state), I can point to more targeted resources. Take it one step at a time—you’ve got this.