The share of the American population that is 65 or older has been increasing as the Baby Boomer generation reaches retirement age. Unfortunately, not all Americans of retirement age have the personal savings to live out their golden years in peace and comfort. That doesn’t mean elderly Americans who aren’t independently wealthy should be left out in the cold, though.
The good news for older adults is that there are multiple ways to finance senior Assisted Living. We list the top six that we have discussed with residents prior to their decision about choosing one of our Chelsea communities.
It’s not uncommon for seniors to pay for living costs out of their private funds. The money could come from savings accounts, retirement plans, pensions, investments, or even inherited money. When paying for senior living expenses out-of-pocket, it’s important to get a rough estimate of how much it will cost to move into a high-quality Assisted Living community and pay for personal expenses to avoid depleting those funds too quickly.
It’s also important to be mindful of the Assisted Living community’s financial model. Do they require buy-in for their residences or is it a month-to-month rental? Typically, most Assisted Living communities like Chelsea Senior Living will include all household expenses (utilities, housekeeping, maintenance, cable TV and internet, etc.). Knowing this information can greatly reduce the financial stress you may feel when beginning your search.
Long-Term Care Insurance
Having a long-term care insurance policy in place can make it easier to cover senior living needs. However, this approach is not right for everyone. Long-term care insurance policies are meant to insure only specific things for fixed periods of time.
Policies vary widely in terms of what’s covered and what’s not, and lower premiums often leave seniors without the benefits they need when their policies are needed. Anyone considering taking out a long-term care insurance policy to pay for senior living expenses should consult a financial advisor before signing on the dotted line.
Medicare does not pay for long-term senior living, but there are third-party insurance plans that will. Most policies won’t cover Independent Living fees, but many will cover Skilled Nursing, Memory Care, and Assisted Living expenses.
As with any insurance policy, third-party Medicare supplements usually require certain parameters to be met before a policyholder’s coverage kicks in. One of the most common stipulations is that policyholders require help with two or more activities of daily living before coverage for long-term care kicks in. At that point, the insurance company should begin covering the cost of senior needs such as help with grooming, bathing, dressing, and general mobility as well as incontinence management.
In some cases, life insurance policies can be converted into pre-funded accounts. It’s a relatively common practice and is surprisingly simple. Seniors may be able to access the cash built up in life insurance policies and net more than they would by surrendering life insurance policies instead.
Seniors who want to convert their policies won’t get face value. However, they will avoid issues such as waiting periods, care limits, premium payments and fees, and application costs.
Accessing home equity can be a great way to pay for senior living. People who plan to move into Assisted Living communities don’t have to sell their homes. They can also take out home equity lines of credit or reverse mortgages. It’s important for people who plan to take out reverse mortgages to do some research, though, because there are three different ways to go about it.
- Home equity conversion mortgages are the most common form of reverse mortgages and are insured by the U.S. Department of Housing and Urban Development (HUD). There are no income or medical requirements and the funds obtained through the reverse mortgage can be used in any way.
- Single-purpose reverse mortgages are the most affordable type of reverse mortgage. They’re typically offered by state, local, or other agencies, and the funds can only be used to pay for specific, lender-approved purposes.
- Proprietary reverse mortgages aren’t insured or overseen by the FHA and are reserved for high-value homes. These types of reverse mortgages impose no upfront fees or monthly mortgage insurance premiums but are inherently riskier because they aren’t backed by the government.
Eligible wartime veterans and surviving spouses may be eligible for a VA Aid and Attendance Pension. Qualified candidates must:
- Receive health care through the VA
- Have approval for the service
- Live in an area where the necessary service is offered
Some veterans are also eligible for an Aid and Attendance Housebound Allowance. This benefit can offer veterans thousands of dollars a year to help pay for Assisted Living in NY.
Book a Tour
Chelsea Senior Living has been providing long-term and respite care to New York and New Jersey residents for over 30 years. In that time, we’ve learned a lot about how to provide both quality care for aging adults and peace of mind for their families. We offer many levels of care, so no matter what our residents need to live fulfilling, independent lives, they’ll find it in one of our communities. Call (908) 889-4200 to learn more about what to expect from Assisted Living in NJ and book a tour.