Overall costs can be an important factor when considering a community that provides supportive services and care. Be sure to check these overlooked financial resources.
AID & Attendance
The Veterans Affairs offers financial aid for veterans and spouses who are in need of care. This may include individuals in assisted living communities. Although assistance may vary, the support can be significant for those who qualify. To learn more about how the program might benefit you or your family member, visit www.veteranaid.org.
Long Term Care Insurance
Long-term care insurance can cover a portion of a resident’s stay in an assisted living community. Because these policies vary from person to person, coverage is individualized. Our staff can help identify what is required for coverage under your existing insurance policy. We can also help fill out the necessary forms and will work with your insurance provider, to assist you in receiving your benefits.
This financing product is a loan that is made available to persons aged 62 or better. It can be used to put the idle home equity in the property to work. The homeowner’s obligation would be to repay the loan. However, this repayment is deferred until the owner passes away, moves out, or the home is sold. For couples, as long as one person still occupies the home, there are safeguards for them to remain living at home. Click here for more information through AARP.
If you have cash accumulated in a life insurance product, you may be able to liquidate your policy to fund the costs of assisted living and other services. This may be a good way to assist with the costs without depleting other income sources. There are many excellent resources for this kind of financing solution, but the key is keeping your premiums current on your policy.
Secured Lines of Credit
A secured line of credit is quite similar to a bank account. However, instead of making deposits, you borrow money against it. This source of credit can be secured by CDs, stocks, personal property and cash. To help you pay for assisted living services, you can borrow from it without having to renegotiate terms. If you do not qualify for a secured line of credit, you may also want to consider a reverse mortgage.
Gift Tax Exemption
Family members may want to assist in the move to an assisted living community. One way would be to take advantage of the IRS gift tax exemption. Individuals can gift up to $14,000 per person each year without having to pay any taxes on such gifts. However, contact your personal financial advisor or tax professional; these individuals can assist you in finding out how this may benefit both you and your loved one.
Approach Social Security (SS) benefits tactically. Historically, it was wise to take SS benefits early and invest them. Today, that’s not necessarily so. Maximized benefits may best be found through delayed retirement credits. Depending on your birth year, benefits increase by 3-8% annually. So if you wait until age 70 to collect, that monthly check could increase by 25% or more. And a surviving spouse receives the entirety of that benefit upon the worker’s death, making delayed retirement credits even more valuable.
With life expectancy after retirement now standing at 17.2 years for males and 19.9 years for females, that larger monthly check will be most welcome. For couples, special consideration should be given to who first takes the benefit when. One partner can file and suspend, choosing to continue working and accumulate delayed retirement credits, while the other collects spousal benefits immediately. Study the new rules to choose your best course. Click here for more information through SSA.
Selling the Home
Private homes are typically the most valuable asset we hold. Its sale when transitioning to a senior community is often the best and most ready source of revenue.
When one partner needs assisted living, and the other partner chooses to remain in the home, reverse mortgages may make sense. They allow a homeowner to stay in the home while tapping into the equity the couple has built. Mortgage holders get tax free cash flow as a loan against that equity, a loan that doesn’t need to be repaid until the house is sold or the owner moves out or dies. Reverse mortgages do not affect Medicare or Social Security benefits.
Be sure to vet lenders and their terms thoroughly before making any decision. The HUD’s website will help you locate a FHA-approved, reputable lender. Click here for more information through HUD.