When it comes to senior living, you want the best care options and programs available. But how do people afford these costs? Isn’t senior living expensive?
Fortunately, there are many options for affording quality senior living. Plus, it’s possible that moving to a senior living community can be a cost-saving move when you factor in all the expenses of owning property and maintaining a home.
From reverse mortgages to long-term care insurance, read on to learn more about common ways to pay for senior living, and when you should begin your financial plan.
How early should one start a plan for financing senior living?
Ideally, you should start your financial plan for senior living as early as you can. This gives you the maximum amount of time to prepare and sort out the details. Consulting with a lawyer and financial advisor is also wise, to help you fully understand your options, set up accounts, and plan appropriately.
If you or a loved one were to develop memory loss as you age, there also are certain steps and precautions you should be aware of that will protect you and your assets.
Whether you decide to stay in your home as long as possible or move to an assisted living community, you have financial options to help pay for expenses. Developing a long-term plan that will support you as you age will be the most beneficial.
What are ways to go about financing senior living?
Senior living most often is financed with private pay options, including personal funds and savings. Seniors may use retirement funds, Veterans Aid, or take advantage of the equity they’ve acquired in their home.
Remember that if you decide to move to a senior living community, you’re getting much more than just a place to live. In addition to housing, your utilities, meals, transportation, and life enrichment programs are all included. When you need clinical support, you’ll have 24-hour access to medical professionals dedicated to your care. Making note of the benefits of each type of care can help you make the right decisions for yourself or your loved ones.
If you choose a community such as The Kensington, you can properly “age in place.” This means that no matter what your assisted living needs are or how they change as you age, you will have a loving home with us.
Read on for the most common options for financing senior living.
Reverse mortgages allow you to unlock the equity in your home. The equity is converted into payments to you that usually are tax-free, and you don’t have to pay it back for as long as you live in your home.
If you decide to move to an assisted living community, you, your spouse, or your estate would repay the loan. This sometimes means selling the home to repay the loan.
If you’re 62 or older, a reverse mortgage may be a good option for you to pay for healthcare expenses. However, there are some disadvantages to consider. Reverse mortgage lenders will charge fees and other closing costs, your interest will add up over time, and you still will have to pay property taxes, insurance, utilities, and other expenses since you keep the title to your home.
Veterans Aid and Attendance
Many veterans have earned Aid & Attendance pension benefits they are unaware of. These benefits can help them and their families pay for senior care at home or in an assisted living community.
As of December 2018, a single veteran who qualifies for Aid & Attendance can receive up to $1,881 per month, a married vet can receive up to $2,230 per month, and a surviving spouse can receive up to $1,209 per month.
The general guidelines of eligibility are as follows, but each case is decided by the VA: Veterans who served on active duty for at least 90 consecutive days, including at least one full day during a time of war, may be eligible if they also qualify for the basic Veterans Pension and meet the financial and clinical requirements.
Widowed spouses may also qualify if they meet the requirements and have not remarried.
Bridge loan or senior line of credit
These are short-term, interest-only loans that use a home’s equity to pay for senior living expenses until the home sells. Then the borrower can pay off the loan with money from the sale of the house.
A trust allows a third-party trustee to hold assets on behalf of a beneficiary. Trusts specify the agreement on how and when the assets pass to the beneficiaries. They avoid the probate process that assets passing through a will must undergo, so beneficiaries can have quick access to the assets.
Trusts protect your assets and give you control of the terms. There are several different types of trusts to suit your specific situation, and state laws also vary. It is recommended that you seek legal and accounting expertise to ensure the trust is chosen and set up correctly.
Long-term care insurance
Purchasing a long-term care insurance policy helps cover the costs of care if you develop a chronic medical condition, disability, or memory loss. This can cover care at your home or an assisted living community.
To use long-term care insurance, you need to plan well in advance — you won’t qualify if you already have a debilitating condition. Most people purchase this insurance in their mid-50s to mid-60s. You’ll become eligible for benefits once you’re able to prove you have a claim.
Choose the right community for your loved ones
Choosing the right community for your or your loved ones can be challenging. That’s why The Kensington Redondo Beach strives to go above and beyond our care to set ourselves apart. Offering a range of care, from basic needs to memory care, allows seniors to truly find a home where they can grow and thrive.
For any questions you may have about our community, we can help at any time.
Additional Recommended Reading:
- Financial Strategies for Exceptional Assisted Living or Memory Care
- How to Plan Your Finances If You or Someone You Love is Diagnosed with Alzheimer’s
- Care and Rehabilitation after Hospitalization