Tips for Funding Senior Living Expenses

Preparing for any big life event is crucial to success and funding senior living is no exception. When planning how to make sure you are ready for a move to senior living, following these three steps can help to ensure funding senior living is well managed.

Step #1 – Assess all personal assets

Start by looking at all financial assets including personal savings accounts (including money market accounts and certificates of deposit), pensions, 401ks and individual retirement accounts; stocks, bonds, and mutual funds; real estate; Social Security benefits; long-term care insurance; and annuities. Next tally up the value of items like art, jewelry, vehicles, coin collections, precious metals, and other personal valuables. Also, if cryptocurrency is in the portfolio that’s one more asset that can be added. Any or all of these assets are among the most common options for funding senior living.

In addition to these personal assets, many seniors don’t realize they have another — life insurance —that should be considered. As described in our blog, “How Insurance Can Help Pay for Senior Living,” whole and universal life insurance policies purchased decades ago have been accruing value that may be accessed in several ways including cash withdrawals, loans, life settlements, and policy surrender. For seniors who no longer need life insurance to protect loved ones this money is an excellent resource for funding senior living.

Step #2 – Assess outside sources

For seniors who lack a deep retirement portfolio, there are also government programs that should not be overlooked for funding senior living. These are especially helpful for low-income seniors and those with disabilities.

In addition to regular Social Security, Supplemental Security Income is a program designed to provide monthly payments to those with very limited income and resources as defined in the ssa.gov article, “Exceptions to SSI income and resource limits,” and who are 65 or older or have a disability (those over 65 do not have to be disabled to qualify). It’s also important to note that some states provide additional benefits to those who qualify for SSI which may be administered by the state and/or the Social Security Administration as explained in the ssi.gov article, “Supplemental Security Income (SSI) Benefits.”

Another possibility is Medicaid, which unlike Medicare can help with funding senior living for those who qualify. This state-run program is the nation’s largest payer for long-term care and like SSI requires that seniors meet eligibility requirements that include age, income, and disability. Information about how and where to apply is provided in the medicaid.gov article, “Where Can People Get Help With Medicaid & CHIP?”

United States veterans who served during wartime (and their survivors) and were not dishonorably discharged should also consider veterans benefits for funding senior living. The first step is to apply for the Veterans Pension which has a variety of qualifying requirements including age, income, net worth, and others spelled out in the va.gov article, “Eligibility for Veterans Pension.”

Once a senior receives a VA Pension, the second step is to apply for additional benefits under the VA Aid and Attendance or Housebound program. In addition to the requirements of the VA Pension, seniors must also meet at least one of the following:

• Needs someone to help perform daily activities (dressing, feeding, and bathing).
• Must spend all or most of the day in bed because of an illness.
• Is in a nursing home due to a mental or physical disability.
• Has limited eyesight (even with glasses or contact lenses has only 5/200 or less in both eyes; or concentric contraction of the visual field to 5 degrees or less).

For application instructions and links to required forms check out the va.gov article, “VA Aid and Attendance benefits and Housebound allowance.”

Step #3 – Create a plan

The final stage of the process for funding senior living is to create a plan and the smartest way to do that is with a financial professional. This is especially important for those with considerable personal assets because it can not only help avoid unnecessary taxes, but can also assist with liquidating and divesting strategies, managing debt, updating wills and trusts, and supporting family communications. For help finding a financial professional the National Association of Personal Financial Advisors provides a search tool on their home page.

Funding senior living doesn’t have to be difficult with a plan in place. At One Lincoln Park, we offer seniors a beautiful home that is safe, comfortable, and welcoming. Contact us today to learn more about our community and schedule a tour.