As you move closer to making a decision concerning senior living for yourself or for a loved one, you’ll want to consider every possible source of funding. The good news is there are many options, from insurance and savings, to Veterans Benefits, to reverse mortgages. Meeting with a financial advisor is one way to be sure you are considering all possibilities.
Paying for Senior Living: 7 Options
- Selling your home. For many older adults contemplating a move to senior living, selling their primary residence is a favored option for funding their new home. Meeting with a real estate agent can help you determine your home’s value and also provide an accurate picture of the local housing market. In addition, if you have already chosen a particular senior living community, consider meeting with their sales staff to see if they can offer any specific advice.
- Reverse mortgages. A reverse mortgage is a type of home equity loan that can be used for paying for senior living by accessing the equity in their home to supplement their income in retirement. Homeowners 62 and older who own their home outright or have small mortgages may be eligible. It may make sense for a couple when one partner needs to move to senior living while the other can remain in the home, and who can still keep up with the cost of home maintenance, property taxes and insurance. To qualify, homes must meet FHA property standards and flood requirements.
- Personal savings. Each situation is different, whether you are talking about traditional savings, stocks, bonds, annuities, or other investments. Check with your financial advisor and CPA to discuss the best course of action and tax implications of tapping into each as a method of paying for senior living. You might also meet with family members to discuss whether they would be willing to contribute.
- Income. Are you receiving a pension? Social Security? Regular dividends from your stock holdings? Maybe you are still working. Many seniors who are able to continue to work can use their income to pay for senior living. Be sure to consider all sources of income.
- Long-term care insurance. This is a policy purchased through a private insurance company to cover the costs of home care, adult daycare, assisted living, memory care, skilled nursing, respite care and hospice. Policies often cover some homemaker services, such as meal preparation or housekeeping, as long as it is in conjunction with the personal care services you receive. 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.
- Life insurance conversion. Life insurance conversion allows older adults to convert their policy benefits directly into monthly benefits to help pay for long-term care needs. These include home care, assisted living, skilled nursing, and hospice. Any type of life insurance plan can be converted: whole, term, or universal. This account is a Medicaid-qualified account.
- Veterans Aid & Attendance benefits. Wartime veterans or a surviving spouse with limited income may be eligible to receive a non-service-connected pension. This pension may be added to your regular monthly veteran’s pension to assist in paying for long-term care, such as assisted living, home health care, and adult day care or skilled nursing. To receive additional monthly benefit, you must meet specific requirements.
When it comes to paying for senior living, you have options. And at Senior Star, we are here to help you navigate the possibilities. Download our free guide “A Family Guide to Funding Senior Care & Housing” for more in-depth and helpful information.
Questions about Senior Star and our senior living communities? Contact us.