When it comes to choosing senior living, there are so many more options today, whether it’s the size of the community, levels of care available, amenities and services, and more. And with all these options comes numerous possibilities for paying for senior living. Here are five to consider.
Paying for senior living: getting started
The first step in considering how you will pay for senior living is to get past the “sticker shock,” especially if you are looking at supportive care for a loved one. Like everything, costs have risen over the years and can seem out of reach.
But once you identify sources of funding you may have overlooked, you’ll have the knowledge you need to determine your best strategy for paying for senior living.
Get the facts on what Medicare and Medicaid will—and won’t—cover
Medicare only pays for long-term care if you require skilled nursing services or rehabilitative care:
- In a nursing home for a maximum of 100 days.
- At home if you are also receiving skilled home health or other skilled in-home services.
- It does not pay for non-skilled assistance with Activities of Daily Living (ADL), (referred to as “custodial care” in assisted living), which makes up the majority of long-term care.
Medicaid does pay for the largest share of long-term care services, but to qualify, your income must be below a certain level and you must meet minimum state eligibility requirements based on the amount of assistance you need with ADL.
Five Options for Paying for Senior Living
1. Veterans Aid & Attendance benefit
Wartime veterans or a surviving spouse with limited income may be eligible to receive a non-service-connected pension to assist in paying for long-term care such as assisted living, home health care, adult day care or skilled nursing. Known as Aid & Attendance (A&A), this increased monthly pension amount may be added to your monthly pension if you meet certain conditions.
2. Life insurance
Another possibility for paying for senior living is by converting a life insurance policy into a long-term care benefit plan. 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. Unlike life insurance, this account is a Medicaid-qualified asset.
3. Long-term care insurance
Long-term care (LTC) insurance helps to pay for the cost of home care, adult day care, assisted living, memory care, skilled nursing, respite care and hospice by covering services typically not covered by health insurance, Medicare or Medicaid. Costs and benefits vary, so you should shop around. But remember the cost of a policy is not only based on the type and amount of services you choose, but also how old you are when you buy the policy. The younger you are when you purchase your policy, the more affordable your rates will be.
4. Your home
A reverse mortgage is a type of home equity loan for homeowners 62 or older. It may make sense for people who don’t plan to move, who can still keep up with the cost of home maintenance, property taxes and insurance, and those who want to access the equity in their home to supplement income in retirement. Before making your decision, take the time to talk to a financial professional so you can consider if this is a good choice for you.
Another way your home can come in handy when paying for senior living is by an outright sale of the property. Not only would this give you funds, it would relieve you of the burden and costs of home upkeep. You also could turn the home into a rental and use those funds to help pay for a move to senior living. Give serious thought to all these options before taking action.
Social security benefits, pensions, dividends from stocks, personal savings, and funds from a family member are all forms of income that could be used for paying for senior living. Carefully consider your financial situation and speak with a trusted financial advisor so you can be sure you are considering all options.
Don’t forget the value senior living offers
It’s important to understand the cost of senior living and possible funding sources. But don’t lose sight of the tremendous value senior living can offer you or a loved one: a carefree, exceptional lifestyle filled with friends, wellness, and support— and most importantly, peace of mind for you and your family.
Senior living, the LSS Senior Living way
At LSS Senior Living, our goal is to offer seniors quality care and comfort in a friendly and warm environment that feels like home. We offer a continuum of services to lend a helping hand when you need them. Find out more about our communities:
Speak to an advisor today, we’re here to help!