Financial Options for Affordable Senior Living

Author

Savannah Grand of Sarasota

For more information about the author, click to view their website: Savannah Grand at Sarasota

Posted on

Nov 14, 2024

Book/Edition

Florida - Sarasota, Bradenton & Charlotte Counties

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Moving to a senior living community is an exciting step that offers the chance to enjoy a maintenance-free lifestyle with access to social engagement, amenities, and care as needed. When considering this transition, one of the biggest questions is often how to cover the costs. Fortunately, a variety of financial options can help fit the needs of different budgets and situations.

At Senior Living Management, our communities are dedicated to guiding residents and families through this financial decision-making process. Our partners at ElderLife Financial and AidandAttendance.com work closely with each family to evaluate available resources and identify the best options for funding senior living. Below, we outline some of the top financial solutions that families use to make senior living affordable.

Understanding Personal Resources

Creating a budget is the first step in understanding the affordability of senior living. Over time, you may have accumulated savings, assets, or insurance policies that can be used for senior care. Some common resources to consider include:

  • Savings accounts, 401(k) plans, stocks, bonds, and CDs: These financial assets can often be drawn upon to pay for ongoing care expenses.
  • Home equity: For many seniors, the equity in their home is a significant asset. Working with a Seniors Real Estate Specialist® (SRES®)—a Realtor® who specializes in helping older adults—can help maximize the home’s value and provide funds for senior living. During this process, families can also choose to liquidate belongings or hold an estate sale to generate additional resources.

Financial Benefits for Veterans

The Department of Veterans Affairs (VA) offers benefits to veterans that can help cover senior care costs. The Aid and Attendance benefit is available to eligible U.S. military veterans and their spouses, providing up to $2,600 of monthly, tax-free income to help offset care expenses. Eligibility can typically be determined quickly by reviewing key factors like wartime service dates, discharge type, care needs, income, and assets.

Long-Term Care Insurance

Long-term care insurance is often purchased to cover the future costs of senior care. These policies vary in terms of the services and care types they cover, so it’s essential to review the policy details or consult the insurance provider to confirm coverage for assisted living or memory care needs. ElderLife offers complimentary policy reviews to ensure families are maximizing their benefits and fully understanding available options.

Life Insurance Options

While life insurance is traditionally intended for beneficiaries after the policyholder’s passing, some policies allow seniors to access funds during their lifetime to pay for care. This option may include surrendering the policy, borrowing against it, or selling it in a life settlement. Since not all policies offer this flexibility, it’s advisable to review your policy terms to see if it can contribute to senior living costs.

Tax Deductions

The IRS offers tax deductions for certain medical expenses that exceed 7.5% of an individual’s adjusted gross income, which can include some senior care costs. Since tax rules regarding medical deductions can be complex, consulting a tax advisor can be helpful to identify deductions and potentially free up more resources for senior living expenses.

Additional Financing Solutions

When immediate funding isn’t available, short-term financing options like bridge loans and reverse mortgages can help cover costs temporarily or unlock funds tied up in home equity.

  • Bridge Loans: Bridge loans are often used to cover the gap between moving to a community and receiving funds from other resources, such as home sales, VA benefits, or insurance policy payouts. ElderLife Financial offers bridge loans that can be approved quickly, often within 24 hours, allowing seniors to move into their desired community without delay. Once other resources become available, families can repay the loan and continue funding care with the released assets.

  • Home Equity Conversion Mortgage (HECM): A reverse mortgage, or HECM, allows homeowners aged 62 and over to tap into their home equity for funds while remaining in the home. This type of loan is federally regulated, ensuring fair lending practices. A mandatory counseling session helps homeowners determine if a reverse mortgage is the right solution. For seniors who plan to stay in their home but need access to funds for care, an HECM may offer a viable financial solution. Consulting with a federally approved lender can help explore this option further.

Embracing Affordable Senior Living

Moving to a senior living community offers a new chapter filled with comfort, engagement, and care. With many financial solutions available, paying for senior living can be manageable and customized to fit individual circumstances. Senior Living Management is committed to supporting families through every financial decision. If you’re ready to explore affordable options, contact us to learn more about how our trusted partners and financial guidance can help you transition into a vibrant, fulfilling senior living experience.

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