Navigating the transition to senior living is a significant step, marked by challenges and opportunities. Benefits to senior living for loved ones are personal care, an individualized approach, assistance with daily living, and social engagement with community members.
However, one of the foremost concerns for loved ones and their families is the financial aspect of this transition. Fortunately, various avenues and resources are available to help cover the costs associated with senior living. Different ways to pay for senior living may include personal funds, government programs, and private financing options.
Researching options and having a financial plan can make senior living affordable and provide your loved ones with the care and support they deserve.
When considering senior living for a loved one, family members can start by encouraging open discussions about financial matters within the family. Transparent communication fosters an environment where everyone is on the same page and works collaboratively for a comfortable transition.
When assessing the current financial landscape, families can consider projected expenses and establish a budget that aligns with the desired senior living experience. The most personal and immediate avenue for financing senior living involves tapping into personal funds or out-of-pocket funds.
Personal funds may include savings, income from investments, pension, retirement accounts carefully cultivated over the years, or proceeds from the sale of a home. While this approach demands a thoughtful examination of one’s financial portfolio, it offers the advantage of autonomy. Loved ones and their families can make decisions based on personal preferences for a tailor-made approach to senior living.
Government programs provide a safety net for older adults, offering various avenues for financial assistance. Social Security, a cornerstone of financial stability for many older adults, can contribute significantly to covering living expenses.
Several federal and state government programs help with health-care related costs. However, government programs may differ in benefits and eligibility requirements.
Medicaid is a combined federal and state government program for those with limited income. Medicaid varies by state, with some programs that cover medical care costs and the cost of senior living for low-income people and those who meet other eligibility requirements.
State Health Insurance Assisted Program
The State Health Insurance Assisted Program (SHIP) is available in each state and offers one-on-one counseling and assistance with government programs. SHIP can provide information on eligibility, coverage, appeals, and out-of-pocket costs based on individual family needs.
Department for Veterans Affairs (VA)
The Veteran Affairs program provides coverage for long-term care at a facility or at home for some veterans. Family members can contact a VA medical center if a loved one is eligible for veterans’ health care benefits and more information.
Social Security Administration Programs
Social Security is a government program that provides financial benefits to individuals with disabilities and retired people. Social Security Disability Insurance (SSDI) is for people with a medical condition, a disability or who meet the following criteria:
- Have worked in jobs covered by Social Security
- Are unable to work
- Have medical conditions will last at least a year
Supplemental Security Income (SSI) is another program that provides monthly payments to people whose income falls under certain limits. Social Security also has compassionate allowances for people with dementia.
Private Financing Options
Several private ways to pay for senior living can depend on a loved one’s age, health status, and financial situation.
Long-Term Care Insurance
Long-term care insurance is a beacon of financial security, specifically designed to cover senior living expenses. Investing in a policy earlier in life provides comprehensive coverage when needed.
While premiums may seem like a commitment, they offer peace of mind when they account for senior living expenses. The type of policy determines the coverage, services included, and how long the benefits last.
For older adults who own a home, a reverse mortgage lets them loan part of the ownership value into cash without the need to sell their home. Repayment is not required until you sell the home, no longer live there, or pass away.
The reverse mortgage is available to those 62 and older and requires no income or medical requirements. The loan is tax-free, and older adults can use the loan for senior living. However, they can only get a reverse mortgage if there is no existing mortgage or other debt against their home.
Life Insurance Policies
Some companies offer a combination policy, including life insurance and long-term care insurance. Older adults can get a tax-free cash advance.
Loved ones who live in senior living communities or long-term care can get the accelerated death benefit. Family members can check a loved one’s life insurance policy to see what is covered and when they can access the benefits.
Another way to pay for senior living is to sell a life insurance policy for its current value, but the proceeds are taxable. It’s called a life settlement and is available to men 70 and older and women 74 and older.
Personalized Senior Living at Juniper Village
Families of loved ones can make informed decisions that align with their loved one’s needs and financial circumstances when considering diverse options for paying for senior living. Each family’s situation is unique, and seeking advice from financial advisors, senior living experts, and professionals in the field will provide personalized guidance.
Contact Juniper Village at South Hills about financing resources and helping prepare a loved one for the quality care needed in retirement.