The cost of living in a senior assisted living facility can be expensive, as such care can run between $2,000 and $5,000 per month. This is usually much more than a person (or couple) is paying each month to live in their own home. How can a person come up with the money for the care and help they need? Below are just a few ideas:
1. Spend Your Personal Savings or Investment Income
Of course, the simplest way to pay for senior assisted living care is to use your personal liquid assets, such as money in a savings account, CD, IRA or 401(k). Investment income, interest and annuity income can also be used for care without your having to sell assets. However, senior living can quickly use the life savings of many older Americans. Fortunately, personal funds are not the only place you can look for the money you need for assisted living.
2. Take Advantage of Veterans Aid
If you are a veteran or the spouse of a United States veteran, the U.S. Veterans Administration may be able to help you with assisted living funding. This is especially true if your disability or injury is a result of your military service.
However, there is an additional benefit for those veterans and surviving spouses who meet the qualifying income requirements. This "aid and assistance" benefit is available to service men and women (and their spouses) who served at least 90 days in the military (or at least one day during war time). You must also meet the medical qualification. The current maximum benefit is $1,949 a month for married veterans, $1644 for single veterans and $1056 for a surviving spouse.
3. Using Medicaid Benefits
Medicare does not pay for expenses related to long-term care. However, Medicaid covers assisted living expenses for low-income Americans who do not have any assets they can sell to pay for their care. These benefits are funded by the federal government but administered by each state. Currently 40 states have Medicaid benefits for at least some senior living expenses. The requirements and amount of the benefit varies by state.
4. Convert Your Life Insurance Policy
That life insurance policy that you've been paying on for decades could be able to help you with your assisted living expenses. Some policies, including whole life, have a cash value that you can trade in the policy for before your death.
Another way you can obtain funding from your life (or health) insurance policy is to take advantage of the policy's accelerated benefit or living benefit clause. In such cases, where an insured person needs care, the insurance company will buy back the policy for a percentage of the death benefit, usually around 50 to 75 percent. So, if you have a $500,000 policy that you've been paying on for years, you could possibly get a check for $250,000 to $375,000 to pay for a senior assisted living facility.
It's important to remember that in both of these scenarios you'll be forfeiting your life insurance benefits, so you'll want to set funds aside for your end-of-life expenses.
5. Consider a Reverse Mortgage
A reverse mortgage allows you to tap into the equity you've amassed in your home without having to sell your home. This might be a good option if only one partner needs to move into a care facility or if you think that you might only need to live in a senior care facility for a limited amount of time.
A reverse mortgage is a loan that pays you on a monthly, quarterly or one-time basis, based on the value of your home, the home's condition and your age when you take out the loan. No re-payment of the loan is required (although your heirs will generally have the option to pay off the loan at your death.) Instead of repayment, the house is deeded to the mortgage company at your death.
6. Bridge the Gap Until You Sell Your Home
If medical needs arise or you and your spouse are no longer able to navigate the stairs or the large expanse of your existing home, senior assisted living can be a good solution. To allow you to move before you sell your home, many lending institutions offer bridge loans that will carry you over until you close the sale on your family home and collect the proceeds.
7. Long-Term Care Insurance
If you were savvy enough to invest in long-term care insurance when you were younger, now is the time to take advantage of the policy's benefits. Most such policies will pay for assisted living expenses. However, the amount varies widely, depending on the company and the policy. The benefit can be as little as $1,500 per month or as much as $9,000 per month.
Finding the money to pay for assisted living senior care doesn't have to be an impossible task. Look for the necessary funds in your home, your life insurance or long-term care policies or through a variety of federal and state assistance programs.
Contact Heritage Villas today for additional tips and advice for helping pay for assisted living.