For seniors aspiring to a carefree retirement lifestyle at a senior living community, or families searching for the best living options for their older loved ones, there is a growing number of communities available today offering independent living, assisted living and memory care services. Most leading senior living communities offer a range of services and care levels, so the right kind of support is easy to find.
However, the ability to pay for senior living is not rising along with the supply and demand of this industry. Families are not confident in finding ways to cover the costs of senior living and long-term care. According to a recent survey by Next Avenue media outlet, only 24% of the 6,500 participants said they were very confident that they’d be able to afford the care they are likely to need when they’re older.
This lack of confidence is not necessarily due to an impossibly high ticket price of senior living, but more because of families’ perception of what resources they have available. According to our Community Relations Director at Tuscan Gardens® of Venetia Bay in Venice, FL, “Many seniors and their families don’t realize all the options they have when it comes to paying for senior living. If there’s the need or desire to enjoy a senior living lifestyle, there are usually several ways to find the funds to pay for it.”
While many seniors just look to their personal savings account to determine whether or not they can afford moving to a senior living community or receiving care at home, there are many other places to find available funds. In addition to one’s personal savings, a number of resources are available to those seeking to pay for senior living:
1. Real Estate Solutions
Home equity is a common resource used by many seniors to fund their retirement. Often, seniors’ equity in their home is quite significant, if not completely theirs. When the home is sold or rented out, the proceeds can go towards paying for senior living services.
A lesser-known real estate solution is a reverse mortgage. A reverse mortgage allows you to use the value of your house to pay for expenses without selling your home. You’ll receive payments to use however you need to in exchange for home equity. This money does not count as income against Medicaid eligibility and is non-taxable as long as it is used in the month issued. You do not have to pay the money back until you sell your home.
To qualify for a reverse mortgage, you must be at least 62 years old, and the home must be your primary residence. This is a good option for those seeking to receive long-term care at home.
2. Veterans Benefits
Many qualifying veterans and their spouses can pay for assisted living through benefits they receive from the Veterans Administration (VA). The Aid and Attendance Pension is part one the Improved Pension benefits for veterans or their spouses who require assistance with daily living activities, such as dressing, bathing, eating, etc.
Aid and Attendance can help pay monthly for long-term care services in the home or at a skilled nursing or assisted living facility. As a pension, this benefit is not dependent on a service-relation injury. To check eligibility and apply, several resources are available both at local Veterans Benefits offices and online.
3. Insurance Solutions
Depending on your life insurance policy, you can use it to help pay for senior living. Some policies come with an “accelerated death benefit,” which can pay cash advances while the holder is still alive.
Another possibility is selling the insurance policy for its current value. This is known as a “life settlement” and is available to those ages 70 and older. The proceeds from the sale can then be used to pay for senior living or long-term care.
4. Long-Term Care Insurance
If you’re likely to need healthcare support in the future, purchasing long-term care insurance may be the best way to make sure care services are paid for when they’re needed. Unlike regular health insurance, these policies cover the costs of care in an independent living, assisted living or skilled nursing community, as well as home care. Long-term care insurance should be bought when the holder is younger and relatively healthy. Those in poor health or already receiving long-term care may not qualify for this kind of insurance.
5. Life Insurance Combo Policies
Because the qualifications for long-term care insurance often deters people from buying it, many companies combine long-term care insurance options with regular life insurance policies. This way, the holder is guaranteed benefits either through pay-outs for long-term care or, if care is not needed, through a death benefit.
Typically, if long-term care is needed, the benefits are triggered when the holder can no longer perform at least two daily living activities or is cognitively impaired. Benefits can be used to pay for care at home or at a senior living community.
Medicaid is a federally and state-funded program that pays for long-term care services for those with very low-income levels and few assets. Eligibility for Medicaid varies slightly from state to state, but for seniors, they must meet the financial and functional health requirements (mainly needing assistance with daily living activities.)
Medicaid benefits can be used to cover the costs of skilled nursing care or assisted living as long as the person resides in that community.
You can choose to enter into an annuity contract with an insurance company, which takes a lump sum or premium you pay and distributes guaranteed, monthly income payments over time. Unlike long-term care insurance, you can purchase an annuity regardless of your health. There are different kinds of annuities, and payments depend on several factors such as the initial premium and age.
There’s no denying that paying for long-term care is complicated, but there are also many different avenues for finding funds. Always approach the financial facet of your retirement plan with thorough research and the help of a financial expert.
“At Tuscan Gardens®, we’re always happy to help seniors and their families make the right decisions for them,” says Clanton. “If you would like to speak to a senior living expert about possible financial options for paying for senior living, don’t hesitate to give Tuscan Gardens® a call!”
At Tuscan Gardens® of Venetia Bay, we’ve mastered the art of living. We’ve perfected the balance of personalized support and an uplifting lifestyle, helping our residents experience independence, joy, and meaning every day.
Offering supportive independent living, assisted living and memory care services for families in Venice, Florida, Tuscan Gardens® of Venetia Bay was founded with one simple, yet profound goal – to create a community worthy of our parents. In all we do, we are guided by the principles of family, culture and engagement, working to represent the remarkable way of life our families deserve.
Luxury, intimacy, opportunity, passion and beauty combine to create what the Italians call sprezzatura – a culture of effortless elegance. The essence of our community is made up not only of mere aesthetics, but an artfully designed lifestyle to bring out the best of what each day has to offer. From dedicated care that respects residents’ individuality and dignity to a lifestyle that nurtures their love of life, Tuscan Gardens® was built to be more than just a residence, but a place to call home.