Paying for senior living expenses is a challenge that many people struggle with. The unfortunate reality is that many seniors reach retirement age without having the assets that they are going to need to cover their expenses. While you may think that you have planned and have enough saved, there are often unexpected bumps in the road that can cause your financial plan to quickly unravel. For example for someone who has been in good health the idea of having to live in an assisted living facility may have never crossed their mind. Then if they end up physically unable to care for themselves and need to get an apartment in an assisted living facility they are unprepared to pay for the costs associated with these types of facilities. Fortunately there are options available to you if you find yourself in a situation like this. By learning about these options paying for senior living expenses can become more manageable for you.
Medicare
One of the most common mistakes that people make when it comes to paying for senior living expenses is thinking that Medicare will help them. The truth is that Medicare was never meant to cover long term care costs. Medicare can be used to cover up to 60 days of staying in a hospital following a major medical problem, but it does not cover long term care in an assisted living facility. Medicare will also help to cover the cost of regular healthcare as well as prescription drugs. While Medicare is definitely very valuable and is of great benefit to many seniors, attempting to rely on it to cover long term care in an assisted living facility is a mistake.
Veteran’s Benefits
If you served our country as a member of the U.S. armed forces then you may be able to use your Veteran’s benefits to help with paying for senior living expenses. Assistance in paying for long term care facilities is provided through the Aide and Attendance Benefit. This program can cover up to $2,200 a month in expenses at a long term care facility. Please keep in mind that even if you are a veteran there is no guarantee you will be approved, and if you are approved there can be a lengthy wait before you actually complete the approval process. While Veteran’s benefits can be a great resource for you if you qualify for them, they shouldn’t be the only source of funding you have in place to cover the costs of living in an assisted living facility.
Private Pay
One option that you may consider for paying for senior living expenses is to simply pay out of pocket for the care that you need. If you happen to have the financial resources to pay for the cost of an assisted living facility on your own, then you are one of the lucky few who enjoy true financial security. The cost of an assisted living facility, especially one that has a good reputation, can be quite high. But if you have no other options available to you then you may have no choice but to pay out of pocket for your long term care needs. Hopefully you have a healthy savings account, retirement accounts, and a pension to help keep money flowing in once you retire. While this should hardly be your goal, if you do in fact exhaust all of your financial resources and have no other options or ways to pay for your care, you can usually qualify for Medicaid.
Reverse Mortgages
A lot of people aren’t clear about what a reverse mortgage is and how it works. A reverse mortgage takes the equity in your home and turns it into money you can access. The first rule of a reverse mortgage is that you must still live in your home if you plan to get one. So if you have to live in your home how can a reverse mortgage help you with paying for senior living expenses in a long term care facility? It can be used to pay those expenses if you still have a spouse that will continue to occupy your home. When the time comes where your spouse is no longer living in your home, then it will be sold and the proceeds from the sale will be used to pay off the money you owe through the reverse mortgage. Any money left over after covering the reverse mortgage money will then be given to you, which you can then use as you see fit.
Getting A Loan
If you’ve reached a point where you can no longer function on your own and require frequent care, you may want to consider getting a loan to get the process started and get you moved into an assisted living facility. Now to be clear getting a loan for this purpose is not meant to be a long term solution. Instead it’s more like a bandage that you put on the problem to keep yourself afloat while you wait for a more permanent solution. For example, if you are planning on selling your house, you can get a loan to cover your assisted living expenses while you wait for the sale of your house to go through. Once it does you can then use the remaining money you get to pay off your loan, then use the rest to help with paying for senior living costs.
Using Your Insurance To Pay For Senior Living Expenses
Another option for paying for senior living expenses that you should look into is whether or not your insurance will pay for your expenses. Not all private insurance policies have long term care benefits, but some of them do. If you are fortunate enough to have a long term care provision in your insurance policy then you should definitely use it to help cover the cost of the assisted living facility you will be moving into. Your insurance may not pay for all of the cost, but it should pay enough of it to relieve you from the financial burden of trying to pay for it all out of pocket.