Financial Options for Senior Living

Senior Lifestyle understands that transitioning to senior living  can be difficult for new residents and their families. One of the most difficult aspects is the conversation about how to pay for assisted living. It’s a discussion that caregivers must have when making new arrangements for senior loved ones. 

Although talks about paying for senior care can be emotionally charged, they are necessary. Understanding what funds and financial options are available can help streamline the search for senior housing, saving seniors and their families stress and frustration.

How To Pay For Assisted Living

There are a number of ways of paying for assisted living for seniors. Generally speaking, the methods for funding assisted living falls into two categories: Non-subsidized and subsidized.

Non-subsidized 

These methods of payment generally come from private funds or loans. There are a number of non-subsidized options for paying for care, including:

• Private savings: A large majority of the costs of assisted living is paid for from private funds. More than half  of long-term care at nursing facilities is paid for privately.

• Reverse mortgages & HELOCs: Reverse mortgages allow senior homeowners to tap into the equity of their homes while they remain occupied. Home equity lines of credit (HELOCs) can be used by seniors or caregivers alike at a lower cost. Check with a financial advisor for more details.

• Life insurance policy conversions: Policies offer several options for accessing the cash built up in them. While seniors won’t receive face value, they will typically net more than the policy’s surrender value. Check with a financial advisor for details about payouts and tax considerations.

• Home care loans: Home care or assisted living loans are meant for short-term financial gaps, most for periods of less than two years.

• Long-term care insurance: This covers the cost of long-term care in certain care facilities, depending upon the policy. Policies may also cover stays in licensed nursing facilities and home health care.

Subsidized 

Subsidized payment options generally come from federal or governmental programs. These include:

• Medicare: Medicare is meant to pay for health and long-term care for persons with limited financial resources. However, not every senior care facility accepts Medicare.

• Medicaid: Medicaid may pay a portion of assisted living costs for eligible seniors in some states. In general, however, Medicaid pays for only about 10% of service costs.

• Supplemental health Insurance (“Medigap”): Medigap is extra health insurance that pays for health care costs not covered by original Medicare.

• Other government help (e.g., veterans’ benefits): A number of additional programs can help pay for senior care, including benefits from the Department of Veterans Affairs. Check with your financial advisor.

Get Advice from Senior Lifestyle

We understand that the search for senior housing can be a long and at times difficult process, and our community advisers are here to help you navigate the journey and discuss your financial options for senior living. Visit our Financial Planning Archive to read articles about saving money to pay for care, including “27 Tips for Saving Money After Retirement.” You can also use our Retirement Community Cost Calculator to see how much money you’ll need for senior living.

For information about a Senior Lifestyle community near you, visit our interactive community map. Here, you can learn about communities that interest you, schedule tours, and meet with advisors. Our team is always ready to help you find a community that suits your needs.