Considering the best senior living options for your family and their associated costs can be overwhelming. According to a survey by the National Center for Assisted Living, the national median costs of care for assisted living services were $4,500 monthly and $54,000 annually in 2023. However, the cost of senior living varies significantly depending on several factors, including location, type of care and the level of services and amenities needed. We’re here to help answer some of the most common questions about how to finance your retirement years.
What Financial Assistance Is Available?
U.S. wartime veterans and their surviving spouses may qualify for the Veteran’s Aid & Attendance benefit, which can help cover the costs of assisted living or nursing care in addition to a veteran’s regular pension. While most veterans in need of assistance qualify, some restrictions do apply. We also recommend allowing plenty of time for the application process.
Does long-term care (LTC) insurance cover assisted living costs?
Depending on the policy, long-term care insurance benefits can be applied to assisted living care and/or nursing home costs. Be aware that premiums can be costly and increase in price with age and poor health, so experts recommend individuals begin planning between the ages of 52-64.
Does Medicare cover assisted living costs?
Families are often surprised to learn that Medicare does not cover assisted living costs outside of 100 days of skilled services or rehabilitative care for a qualified stay. Medicare Part A covers hospital stays, short stays in a nursing home for certain kinds of illnesses and hospice care in the last six months of life, after a standard yearly deductible.
Are there other ways to pay?
Many families’ first option is to pay for assisted living costs with the profits from the sale of their loved one’s home, but they may also decide to explore other options, like renting the house or using the house to qualify for specialized loans.
A bridge loan is designed for individuals who need access to funds immediately but are waiting for a house to sell. These interest-only loans access the home’s equity to pay senior living expenses until the house sells, and then the borrower pays off the loan with money from the sale.
For seniors who have funds invested in a life insurance policy but need financial support now, there are “accelerated” or “living” benefits. The company that initially issued the policy repurchases it for 50 to 75 percent of its face value. Another option, known as a “life assurance” benefit or life insurance conversion program, allows seniors to convert the proceeds of a life insurance policy directly into long-term care payments.
While working through the financial aspects of paying for assisted living can be challenging, The Palms is here to help. Contact us, and we can assist you in creating a financial plan that will work for you or your loved one.
