Enjoying Life Together
To help maximize your family’s resources and assets, while reducing future stress for both you and your loved one, it’s wise to create a long-term financial plan for assisted living. There are a variety of resources available to help:
Public Benefits Counselors are often on staff at Area Agencies on Aging(AAA) and Aging and Disability Resource Centers (ADRC). While usually well-versed in local programs, they may not have financial planning experience. There is no charge for their services; however, there can be long waits to get an appointment.
Geriatric Care Managers (GCMs) help families create and implement long term care plans. Most come from a health care background, but some are also able to help with financial planning. Their services are typically an out-of-pocket expense. The earlier you start working with a GCM, the more they can help you with long-term planning.
Eldercare Resource Planners (ERPs) typically come from financial backgrounds and are specialists in developing financial plans for assisted living. They are paid out-of-pocket, but often “recoup” their cost in the financial assistance resources they find for their clients.
Elderlaw Attorneys are the most thorough option. A legal firm that specializes in elderlaw can provide a “one stop” resource for financial and legal planning. However, they may not be as familiar with local resources, and the high hourly fees can be cost prohibitive for some families.
Paying For Assisted Living
Simply paying “out of pocket” for senior living—with personal income or savings—may be beyond what you or your loved one can afford. Your financial advisor may suggest cashing in a parent’s personal investment portfolios, like 401k plans or IRAs, or one of these other options:
Selling A Home
Selling the family home is one of the most common ways to pay for assisted living. If your parent(s) or other family members aren’t quite ready to let go, consider renting the home instead. A property management company can handle the details for a monthly fee.
If your loved one is a veteran, they may be eligible for benefits that can be used to pay for residential care—especially if they sustained ser-vice- related injuries or disabilities. Contact the Veteran’s Administration (VA) for more information.
This is one of the most underutilized payment options for assisted living, as there are options to “cash out” the policy or borrow against it to pay for care while the policyholder is still alive. Ask your life insurance company about the pros and cons of each.
Assisted Living Loans
Also called “bridge loans,” this relatively new option is designed to provide the funds for a move to assisted living or a continuing care retirement community. The purpose is to cover short term financial gaps (such as waiting for a home to sell or getting approved for a veteran’s pension).
This is a type of loan which allows homeowners age 62 or older to borrow or convert part of the equity in the home for cash to use toward assisted living expenses. There are limitations, though: the borrower must be married and the spouse must continue to live in the home.
Equity Lines of Credit
A form of revolving credit using your home as collateral; the homeowner uses a loan against the home to help pay for living expenses. An equity credit line has lower associated costs than a reverse mortgage and is available to borrowers under age 62.
Long Term Care Insurance
Some seniors are fortunate enough to have long term care insurance. If your loved one doesn’t have a policy, it's probably too late to consider this option. (But you may want to look into a long-term care policy for yourself.)