Having an older loved one in need of assistance can be stressful for various reasons, but don’t let finances be one of them! According to Bankrate, in 2014, the average monthly rate for a single, assisted living bedroom was $3,500. With prices steadily climbing, this number has since increased. When most families start to encounter these prices, it may seem overwhelming. Luckily, the experts at Oaks Senior Living want to help you learn what options are available to pay for assisted living for your loved ones.
Out of Pocket
A significant amount of families tend to pay for senior living expenses out of pocket. Whether their older loved one in need of assistance had sufficient savings, or if a family member is using their annual income, paying out of pocket can be feasible for some seniors. Another option is to have multiple family members pool their income together to pay for assisted living. However, depending on the length of care, these funds are not always enough.
In most cases, long-term care insurance covers the cost of assisted living, but policies do vary. Unfortunately, most families are not covered by long-term care insurance. The prices are only feasible if the coverage is purchased mid-life for the individual being insured. Another insurance strategy is to have your older loved one sell their life insurance policy. Selling life insurance can affect heirs negatively, but in some situations can be used as an option.
If your older loved one is a veteran the Department of Veteran Affairs offers various assistance programs, but the amount of aid varies. To learn more, visit the VA website.
Leveraging the Home
Many seniors downsize to move into a senior living community; after downsizing, an option may be selling their home to pay for the care. For seniors who want to move-in before their home is sold, some communities may pay out rent deferments until the home equity is justified. Another option with leveraging the house is utilizing a reverse mortgage. A reverse mortgage allows the senior to borrow money based on the equity of the home. If your older loved one doesn’t want to sell their home or use a reverse mortgage, they should consider renting their house out for a steady income to pay for assisted living.
In certain states, Medicaid covers the cost of care at assisted living communities. However, Medicaid is only accessible to seniors who have little to no assets. If this is not applicable to your older loved one’s situation, they can also look into other financial solutions.
Bridge Loan or Annuity
A bridge loan may be a risky option but feasible if there are issues with your older loved one liquidating assets quickly. On the other hand, an annuity is a lump sum you pay at once and receive payments back for a certain period.
Paying for assisted living does not have to be from a single source. Be sure you and your loved one know your options and contact a financial advisor for further assistance.
If you would like to learn more about Oaks Assisted Living, please schedule a visit to one of our communities!