7 ways to pay for Senior Community living costs
With the monthly costs of living in a Senior Living community ranging from about $3,500 to $7,000, depending upon where you live, many families struggle to understand how they can afford the additional expenses—even if a parent, relative or spouse requires the care.
For many families, coming up with the funds to pay for a Senior Living arrangement requires some strategic financial planning.
Take a look at the following 7 financing options to cover the costs of a Senior Living community.
1. Use personal funds. Through a combination of Social Security, savings, 401k plans and pension funds, you can find the personal resources to help cover the costs of moving into a Senior LIving community. In the case of Social Security funds, you may inquire about state regulations that govern the amount given to a person if they need to live in a Senior Living community that assists with personal care and medical needs.
Often paying out of pocket is beyond what many can afford for very long. When all your resources have been exhausted, you can apply for Medicaid.
2. Veterans benefits. Veterans can apply to use VA benefits to help cover the costs of Senior Living care. If you have a service-related injury or disability, the approval process should be straightforward.
Under other benefit programs offered to veterans, a veteran and/or a surviving spouse can apply for funds toward the cost of Senior Community living if they meet other qualifications, including a disability and low-income requirements. Talk to the VA for more information about eligibility requirements.
3. Seek Medicaid assistance. If you expect to exhaust all sources of personal funds, which can happen quickly, look into applying for Medicaid assistance. Since Medicaid is run by both the federal and state, the regulations may vary depending upon where you live. In most cases, if you can prove that you have limited funds but require the services provided by a Senior Living community, you can apply for Medicaid benefits to help cover the costs. Oakleaf Village is among the Senior Living communities that accept Medicaid waivers after a period of private pay.
4. Insurance plans. Take a look at the benefits of your insurance policies. If you have a life insurance policy, it’s possible that you can use the funds to cover other expense, including Senior Living costs. Many people mistakenly assume that the funds can only be used after a person’s death. Talk to your life insurance provider to determine if your benefits can be used to fund payments for Senior Living. You may be required to show documentation that the person applying for benefits needs help in two or more Activities of Daily Living (ADL), such as bathing, grooming, walking and eating.
In some cases, it’s possible that you can sell your life insurance policy (described as a life settlement), for a portion of the policy’s face value.
Another consideration is a long-term care insurance policy, which may be used to cover the expenses of in-home care or a Senior Living community. Again, talk to the provider for an explanation of the benefits.
5. Sell your home. If you own property, selling it may be one of the first considerations for funding retirement living arrangements. This is particularly a viable solution if the senior is planning to move into a Senior Living community as part of a long-term solution.
If the home has sentimental value, consider seeking a relative to buy it first. Another option is to rent the property to help cover the expenses of Senior Living.
6. Take out a bridge loan. Considered a short-term loan, a bridge loan provides you with the option of taking out a certain amount of limited funds pending the approval of a larger financial deal, such as the sale of a home. If there is a need to move into a Senior Living community quickly, this may be an option until the sale of a home is finalized.
7. Reverse mortgage. In some cases, if you have a relative who is still living in your home, such as a spouse, you may want to research the advantages of applying for a reverse mortgage. This type of loan allows you to borrow funds against the equity you have in your home. When the relative no longer lives in the home, the funds will need to be repaid. This cost can be covered by the sale of the home.
Need help? We have helped many families explore financial solutions to help cover the costs of Senior Living. We can do the same for you. Contact us today!