Paying for senior living often seems out of the question, but there are many options all seniors and their loved ones should be aware of before making a decision about moving to a community. From the obvious to the unknown here are some of the ways paying for senior living can become a real possibility.
5 tips for paying for senior living expenses
Tip #1 – Rely on personal wealth
For those who have accumulated wealth and planned ahead for retirement, paying for senior living is accomplished using funds from personal savings, pensions, retirement accounts like a 401k, annuities, and investments such as stocks and bonds. Often a financial advisor can assist by helping to choose which funds to use and when, so each is maximized to the greatest extent. To find out more about getting financial advice when paying for senior living, the forbes.com article, “How To Choose A Financial Advisor,” offers expert information.
Tip #2 – Make a sale
Many seniors also include in their portfolio real property that they own, which offers another very common source for paying for senior living. First is the family home, which can often provide cash after the sale and even before with a bridge loan, a short-term loan that is repaid upon the sale and can help when a move is sudden.
Some seniors may prefer to retain their family home and rent it, which also provides monthly income, or they take out a home equity loan or a reverse mortgage. Each offers different options as described in the payingforseniorcare.com article, “Using a Home to Pay for Elder Care: Pros & Cons.”
There are other properties that can help with paying for senior living, for example, commercial real estate. Valuables like collections of coins and art, vehicles, jewelry, and other collectibles should also be considered as sources of funds. Again, always work with a professional who is well-versed in selling specific properties and valuables, whether it’s a real estate agent, an art broker or an auctioneer.
Tip #3 – Investigate government benefits
Aside from personal assets, most seniors also have government benefits of some kind that can be used for paying for senior living. The most obvious is Social Security, which is a monthly payment from the federal government that is based upon the number of years worked and amount paid into the program. Get the facts about Social Security in the Kiplinger.com article, “Social Security.”
In addition to Social Security is Supplemental Social Security Income (aka SSI), another potential source for paying for senior living. SSI is available to low-income adults and children who are blind or otherwise disabled, as well as adults aged 65 and older who are not disabled but meet the specific financial qualifications and can be used to pay for senior living.
Another excellent possibility is veterans benefits which are available to some veterans and their survivors. The U.S. Department of Veterans Affairs provides a program called VA Aid and Attendance or Housebound benefits that can help with paying for senior living when all requirements are met. The first step is for veterans to apply for and receive the VA pension and then follow instructions in the va.gov article, “VA Aid and Attendance benefits and Housebound allowance.”
One government source that is not available for paying for senior living in general is Medicare. Despite what many seniors think, Medicare is actually only meant to cover medical care. As a result, while Medicare may cover some long-term care expenses for a limited time, it isn’t a source for paying for senior living.
Tip #4 – Use long-term care Insurance
Long-term care insurance is obviously intended to cover the often-exorbitant costs associated with long-term care which may be needed for years and require medical care as well as other forms of daily assistance for debilitating conditions. There are a variety of long-term care options that can be combined in a policy and also many limitations and requirements so be sure to know the facts defined in the aarp.org article, “Long-Term Care Worries.”
Tip #5 – Turn to life insurance
Life insurance offers multiple ways to secure cash for paying for senior living, with the exception of term life insurance which has no cash value. Policies can be cashed out, accessed through a life settlement or viatical settlement, or provide a tax-free advance if the policy has an accelerated death benefit feature. Get a detailed breakdown of how life insurance can help in the acl.gov article, “Using Life Insurance to Pay for Long-term Care.”
When paying for senior living seems impossible, take a moment to contact the professionals at The Lodge at Stephens Lake to help make it a reality.