Finding ways to fund senior living may seem like a daunting task but in reality there are more ways than might seem evident at first glance. Rather than worry about it, take a look at some of the best and often easiest ways to fund senior living that you may already have access to.
Two of the most often used sources to fund senior living are personal assets and home equity. Personal assets can include savings, investments in stocks and bonds, 401k, or individual retirement accounts (IRAs), and pensions and annuities. Other personal assets like art, jewelry, antiques, and collections can be sold to fund senior living (make sure to have a family discussion about which items to sell and which items to keep in the family to avoid any major conflicts). For some, working part-time is another way to both stay busy and add to the funds available.
Home equity offers a variety of ways to fund senior living. Since many older adults have paid off their mortgage (or are close to it) this source can be substantial. Many choose to sell their home outright and use the proceeds which are immediately available upon closing of the sale and can also be invested for the future. When an older adult must move to senior living before a sale is completed, they can fund senior living via a short-term bridge loan which can then be repaid upon closing.
Two other ways to fund senior living with home equity without selling the home are through a line of credit or a reverse mortgage. For a look at how these work the payingforseniorcare.com article “Using Home Equity to Pay for Elder Care” spells it out.
Many older adults also use social security to fund senior care. Each monthly social security payment is considered income that can be used for anything by the recipient, so it becomes part of the overall pool of funds available. One thing to keep in mind about social security is that the longer you wait, the more you will receive up to age 70. Also notable is that for those who take social security before their full retirement age and continue working there are wage limits to consider. To learn more about social security, check out the fool.com article, “Everything You Need to Know About Social Security Benefits.”
Like social security, older adults have the option of enrolling in Medicare at age 65. Medicare is available to fund medical care expenses and can be used for senior living communities that are certified by Medicare (the resident must also meet other eligibility options to qualify). Since assisted living or other long-term care options are considered “custodial care” and do not provide medical care such as in a hospital or skilled nursing facility they are not covered by Medicare. Find out how Medicare works in the medicare.gov article “What Medicare Covers.”
Medicaid covers Medicaid-eligible nursing homes for qualified low-income seniors, as well as medical care. Medicaid is a joint federal/state program so states may vary in their coverage and qualification requirements. Learn more about your state at Medicaid.gov.
Long-term care insurance can be a way to help fund senior living in long-term care however, coverage depends upon the policy choices made such as limits and caps on coverage. So when choosing a long-term care insurance policy it’s best to know the coverage options, benefit variables and policy types like those defined in the aarp.org article, “Understanding Long-Term Care Insurance.”
Another often-overlooked way to fund senior living is through life insurance. Since many people get life insurance when their families are young, these policies may no longer be needed for that purpose and thus can provide money to fund senior living expenses. Life insurance policies differ greatly but in general funds can be made available through a variety of policy conversions and settlements, many of which are designed to assist with long-term care needs as described in the acl.gov article, “Using Life Insurance to Pay for Long-term Care.”
Veterans and their survivors may also be able to fund senior living through two Veterans Administration programs — the VA Aid & Attendance program and the Housebound Benefits program. The programs are only available to veterans who qualify for the VA pension and VA health care and also meet other qualifications. Veterans may apply for both at any time and if approved may receive retroactive benefits to help fund senior living. The va.gov article, “VA nursing homes, assisted living, and home health care,” can help you get started.