How to Pay for Senior Living
By the year 2020, one in six Americans will be a senior; the baby boomer generation will swell the senior population from 39 million to 53 million within 10 years. Although long-term senior care becomes mandatory for many people, most wait too long to prepare for their financial needs as an older adult. Being proactive now means taking that first step toward planning finances so the future can be a little more clear and secure. There is no substitute for steadfast planning or for the advantages such planning can offer.
After you determine what level of care living option you or your loved one need (Active Living, Independent Living, Assisted Living community, Memory Care, Rehabilitation, Skilled Nursing), the next step is to do a little financial planning for the cost of care services...but where do you start? Here's how to pay for senior living!
Financial Planning Tips For Seniors
The cost of assisted living care, for example, can be very high, which is why you need to take into account ALL of your expenses and create a financial plan well in advance. Look below for more tips on how to pay for senior living:
- Prepare an Expense Sheet – Create an expense sheet of all your monthly income and expenses. It will provide a good handle on expenditures and highlight potential areas that can be cut down or eliminated to be used instead toward senior housing.
- Assess Your Debt – If you still owe on your home or have medical or credit card debt, look into programs to consolidate payments.
- Update Your Estate Plan – It’s common for seniors to draft a will and then leave it sit. This mistake often means seniors’ estates go to the wrong people or their families incur extra legal fees. Revisit your will and other estate planning measures on a regular basis – we recommend yearly - to ensure beneficiaries and estate executors remain constant, as desired.
Payment Options For Senior Living
Now, it’s time to think about how to pay for senior living communities and elder care. As for funding your lifestyle on either an initial or ongoing basis, there are numerous ways to afford your move. These can range from using personal funds to government benefits to private sources. Personal funding sources can include:
- Personal savings
- Your regular income from retirement plans, pensions, annuities, and Social Security
- The sale of stock or bonds
- Homeowners can apply for a reverse mortgage
- The home equity in your current residence or other real estates
- Assistance from your family members or other close caregivers
- Life settlement from the sale of a life insurance policy, or converting the insurance company plans into cash
Assistance You Must Qualify For:
If you're struggling on how to pay for senior living, there are financial assistance options if you meet certain qualifications. Learn more about each below:
- Long-term care insurance (LTCI) is a policy individuals buy specifically for their own needs. Often, it’s used to pay for nursing home care, at-home care, and in the community.
- Medicare is a federal health care program administered by the US government. It provides health insurance coverage for people over 65, and those with certain disabilities.
- Medicaid program is jointly funded, federal-state health insurance for low-income and high-need people.
- Veterans’ Benefits (VA benefits) is financial assistance for veterans as a pension called the Aid and Attendance Benefit.
- Government housing programs for seniors from HUD (U.S. Department of Housing and Urban Development) has specific requirements for qualification. For individuals 62 and older, they must have very low income (50% of area median) to qualify for the subsidy.
Contact St. Andrew’s
If you'd like more information about these personal care options and how to pay for senior living, contact our representatives. For example, we may accept short-term Medicare Rehabilitation patients in some of our communities. Learn more by calling your community of choice now!