If you’ve been putting off a discussion about moving to a senior living community because you think it may be more than you can afford, you’ll want to make sure you explore the many financial options that could be helpful. It’s also possible that as you do your research, you may realize that the costs of senior living may be similar—or even less—than the recurring costs of home ownership that you face now.
Where is your money going now?
According to The Motley Fool, people over the age of 65 spend roughly 77 percent of their retirement income on five things:
- Health care
- Food
- Clothing
- Transportation
- Housing
In a senior living community, many of these expenses are included in your monthly fees. Plus, you enjoy peace of mind because you have access to advanced health care services, at a predictable cost, if the need arises.
Paying for senior living: exploring your options
- Your home.
You may have built up enough equity in your home to take care of most of the costs of living in a senior living community. There is also the option of a reverse mortgage; a loan that borrows against the value of your home, allowing you to receive a line of credit to help with the cost of senior living. In addition, bridge loans are used to “bridge” the time gap created when selling your existing home. Specialty providers offer bridge loans to help cover rent and moving expenses specifically for senior living. Once you have sold your home, you can use profits to pay off the loan. Low interest or no interest options are often available to those who qualify.
- Social Security.
You might find that all the work you’ve done your whole life will solve the issue of paying for senior living. Income from social security can help cover a large portion of a community’s monthly rental fee. The amount you receive depends upon the number of years you worked, when you started receiving social security, and your lifetime earnings.
- Veterans Aid & Attendance Benefit
Wartime veterans or a surviving spouse with limited income may be eligible to receive a non-service connected pension (above the basic pension) to assist in paying for assisted living, home health care, adult day care, or skilled nursing.
- Long-Term Care Insurance
Long-term care insurance is purchased through a private insurance company to cover the costs of elder care, including assisted living. Like health insurance policies, the price of the premium varies greatly depending on factors like the insured’s health status, age and amount of coverage. Some policies have a specific designated benefit for nursing home care, based on a mental or physical diagnosis, which can be used in paying for assisted living.
- Life Insurance Conversion
Anyone with an in-force life insurance policy can transform it into a pre-funded financial account that disburses a monthly benefit to help pay for long-term care needs such as home care, assisted living, skilled nursing, and hospice.
The truth about Medicare.
It’s important to understand that Medicare does not cover independent living and usually doesn’t pay for assisted living expenses. However, it can cover certain expenses like short-term care in a skilled nursing facility, depending on your eligibility.
Concerned about paying for senior living? Work with a financial advisor.
Consulting a professional is a great way to go over all the options for paying for senior living that are available to you, so you can see which strategy will work best.
A Senior Star senior living community could be just right for you or your loved one. Schedule a virtual or in-person tour. Questions about Senior Star and its senior living communities? Contact us.
