Can you afford assisted living?

February 12, 2018

You’ve begun to consider transitioning yourself, a parent, or another loved one into an assisted living facility. As much as you would like to focus solely on obtaining the highest quality care available, you can’t ignore the very real factor of cost. According to the Genworth Cost of Care Survey from 2017, the average monthly cost of assisted living in the United States is $3,750. What are some of the best options for covering the costs of assisted living? And is assisted living a realistic option for you?

Income and Savings

First and foremost, take a look at your available assets, including savings, 401K plans, or IRAs. Many people who no longer need their homes opt to sell them, using the cash to pay for care. When possible, other family members can pool their savings as well to contribute to out-of-pocket expenses. Even small monthly payments from a handful of extended relatives can make a significant dent in the bills.

senior citizens completing paperwork

Insurance 

Long-term care insurance can be a godsend to people finding themselves in need of assisted living care. Before exploring other options, make sure you know whether your loved one has invested in a policy.

Unfortunately, by the time many people start thinking about assisted living, they’ve surpassed the window for affording long-term care insurance. Even if it’s too late for your parent, however, you can begin to explore options for other future long-term needs in your family. 

Tapping a life insurance policy is another option. While accessing the policy’s cash value now will leave less to heirs later, it can ease present financial burdens. Make sure you’re aware of taxes and fees you may owe for cashing out on a life insurance policy early.

Long-term care insurance can be a godsend to people finding themselves in need of assisted living care. Before exploring other options, make sure you know whether your loved one has invested in a policy. Unfortunately, by the time many people start thinking about assisted living, they’ve surpassed the window for affording long-term care insurance. Even if it’s too late for your parent, however, you can begin to explore options for other future long-term needs in your family. 

Tapping a life insurance policy is another option. While accessing the policy’s cash value now will leave less to heirs later, it can ease present financial burdens. Make sure you’re aware of taxes and fees you may owe for cashing out on a life insurance policy early.

Real Estate

Seniors can leverage their homes to pay for assisted living in a variety of ways. If it’s not the right time to sell, or if keeping the home in the family is important, you or your parent can access cash through a home equity line of credit. Better yet, continue to build the equity in the home while renting it out to others. 

A more complicated, yet viable, way to tap money through real estate is arranging for a reverse mortgage, in which you borrow against the value of the home. While significant fees can be involved with a reverse mortgage, it’s another way to avoid selling a home.

Veterans Aid & Attendance Program

Veterans and their surviving spouses may qualify for a monthly pension toward assisted living benefits. The veteran must meet a number of requirements, including serving during war time, meeting income and net worth limits, and meeting age or disability requirements. Qualifying veterans may receive up to $1,800 monthly toward assisted living care.

Medicaid

While Medicare covers skilled nursing care in facilities or at home, Medicaid can sometimes contribute to assisted living care, depending on the state, the facility, and you or your loved one’s income. Check Medicaid.gov for more information about your state’s assisted living waivers.

What happens when you run out of money?

When you enroll in a non-profit assisted living facility, you don’t have to worry about what happens when your assets run out. Brethren Care Village’s team of care providers will help you assess your assets and funding options. You never have to worry about being kicked out if you truly lack the funds for care.

Facing bills for assisted living care can seem daunting at first, but by exploring a variety of funding options, you or your loved can begin to make plans for transitioning to a new way of life that puts health, happiness, and safety at the center. Contact Brethren Care Village for a tour or schedule an appointment with one of our counselors to discuss how to fund your move to assisted living.

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