Vitamin B12 is required for important biological functions like red blood cell production, nervous system function, and DNA synthesis. Deficiency in B12 can cause a variety of problems including anemia, depression, confusion, fatigue, digestive issues, and nerve damage. 
Vitamin B12 is scarce in plant-based diets, and is a common deficiency, especially in the elderly. Of course, diets low in animal products and high in unrefined plant foods dramatically reduce the risk of chronic disease, but these healthful diets do require a supplemental source of vitamin B12. The rates of deficiency increase with age, and about 20% of adults over the age of 60 are either insufficient or deficient in vitamin B12. Recent research has suggested that the current recommendations for B12 intake may be inadequate – not just for the elderly, but even for young people who have adequate absorption capability. Therefore supplementation with vitamin B12 is likely important for most people, and absolutely required for most vegans to achieve sufficient B12 status.
When vitamin B12 takes part in DNA synthesis, it helps to convert the amino acid homocysteine to methionine, therefore lowering homocysteine levels.  Elevated homocysteine is a known risk factor for cardiovascular disease. Since B12 is important for nervous system function, and many cardiovascular disease risk factors are also risk factors for Alzheimer’s disease, scientists hypothesized that adequate vitamin B12 levels would be protective, and elevated homocysteine would be detrimental with respect to the development of Alzheimer’s. They investigated the relationship between homocysteine, B12, and Alzheimer’s disease diagnosis in a group of 271 healthy older persons (65-79 years of age) over the course of 7 years. Elevated homocysteine was associated with increased risk, and increased B12 with decreased risk of Alzheimer’s disease. 
Future studies will evaluate the effectiveness of vitamin B12 supplementation as a preventive measure against dementia, but we don’t need to wait for those results – we already know that B12 is an important supplement to take, and Alzheimer’s prevention may turn out to be an added benefit of maintaining adequate B12 levels.
A health-promoting diet is the most effective way to maintain excellent health and protect against chronic diseases, including Alzheimer’s and other forms of dementia. But in order to enjoy the strongest protection possible, it is just as important to prevent deficiencies of certain nutrients that may be sub-optimal in an overall health-promoting diet, such as vitamin B12, zinc, DHA, and vitamin D, by taking the necessary supplements.
1. Office of Dietary Supplements, National Institutes of Health. Dietary Supplement Fact Sheet: Vitamin B12. November 18, 2010]; Available from: http://ods.od.nih.gov/factsheets/VitaminB12/.
2. Allen, L.H., How common is vitamin B-12 deficiency? Am J Clin Nutr, 2009. 89(2): p. 693S-6S.
3. Bor, M.V., et al., Daily intake of 4 to 7 microg dietary vitamin B-12 is associated with steady concentrations of vitamin B-12-related biomarkers in a healthy young population. Am J Clin Nutr, 2010. 91(3): p. 571-7.
4. Hooshmand, B., et al., Homocysteine and holotranscobalamin and the risk of Alzheimer disease: a longitudinal study. Neurology, 2010. 75(16): p. 1408-14.