Questions About Paying For Senior Living

If you’re looking into the best senior living option for you or your family, the transition can seem intimidating – in particular, when trying to determine the best way to pay for it. We’re here to be a resource when it comes to your questions about how to pay for the retirement years. If more questions arise when making a financial plan for your loved one’s senior care, don’t hesitate to contact us.

Common Questions About Financing The Retirement Years

How much does senior living actually cost?

The cost varies greatly depending on a number of factors, including your location, type of care, and level of services and amenities. According to a survey by the National Center for Assisted Living, the national median costs of care for assisted living services were $4,500 monthly and $54,000 annually in 2021.

What financial assistance is available?

We recommend you research your options for financial assistance – and we can also help you with this. U.S. wartime veterans may qualify for the Aid & Attendance benefit for veterans and their surviving spouses, which is a monthly benefit in addition to a veteran’s regular pension used to help cover the costs of assisted living or nursing care. As a “pension benefit,” Aid & Attendance is not dependent upon service-related injuries for compensation. While some restrictions apply, most veterans in need of assistance qualify.

Is senior living covered by Medicare?

Seniors and their families are oftentimes unaware that Medicare does not cover assisted living costs – outside of 100 days skilled services or rehabilitative care for a qualified stay. The services covered by Medicare Part A include hospital stays, short stays in a nursing home for certain types of illnesses and hospice care in the last six months of life – all after a standard yearly deductible.

Is senior living covered by long-term care (LTC) insurance?

The specifics may vary according to the type of policy, but long-term care insurance benefits can be applied to the cost of nursing homes and/or assisted living. The first step is finding out how to receive the benefits of your long-term care policy. These policies are most helpful if you’ve been planning ahead – prices increase in cost with age and poor health, so experts recommend individuals begin planning between the ages of 52-64. Some policies even cover needs ranging from adult daycare to assisted living to skilled nursing, with a few policies even paying a family caregiver for in-home care. Premiums may be tax-deductible, and benefits from tax-qualified plans are non-taxable, which makes this option even more appealing.

Are there other ways to pay?

In most cases, Americans’ most valuable asset is their home – so many families first try to pay for nursing costs with the profits made from the sale of a house. Or they may also decide to look into other options, like renting the house or using the house to qualify for specialized loans. One such loan is a bridge loan, designed for individuals who need access to funds right away but are waiting for a home to sell. It’s an interest-only loan that uses a home’s equity to pay senior living expenses until the home sells, at which time the borrower pays off the loan with money from the sale of the house.

You can also consider funding through certain life insurance policies. In order to cash out a policy before death occurs, individuals would look into “accelerated” or “living” benefits. The insurance company that originally issued the policy buys it back for 50 to 75 percent of its face value, although different rules apply depending on the company and type of policy. You could also consider a “life assurance” benefit or life insurance conversion program, which converts the benefit of a life insurance policy directly into long-term care payments.

Determine Your Options In Preparation For The Future

More questions?

If you have additional questions about senior living and financial options, reach out to us at Silver Creek so we can provide you with the information you need to make the best choice for you or your loved one. We’re here to be a resource when it comes to your questions about paying for the retirement years.