Being prepared in advance to successfully handle the costs of long-term care is a smart goal. It may seem overwhelming at first, but with some careful planning and knowledge of available funding options, you can come up with a plan that works for you and your family. While every family’s circumstances are different, there are three general steps you should follow in budgeting for senior living and long-term care.
Before the Budget: What to Keep in Mind.
If you’re feeling everyone else is ahead in this area, the truth is, so many people either put off planning for future care or think the need will not arise. According to The Long-Term Care Poll, an increasing number of those aged 40 and older lack confidence they will have the financial resources to pay for the care they will need as they get older. And there’s nothing worse than worrying, yet not taking action. But with a plan that covers budgeting for senior care, you can move forward with the peace of mind that you will not be blindsided by costs.
Before you even sit down to create a budget, there are some things to consider. For example, if the need for care is not urgent, you can examine ways to use the extra time to further increase your savings. Also keep in mind the geographic location of where you, or your loved one, will be living. That will have an effect on costs. You also want to be honest about what you are looking for in terms of lifestyle, seamless access to future care options, housing and more.
Remember, a budget isn’t something you create and then lock in a drawer. You’ll want to revisit it many times and update it as needed.
Step One of Budgeting for Senior Living: Gather and organize financial documents for yourself or your loved one.
If you are assisting a loved one, they might be resistant to turning over their financial information because they don’t want to give up control. Reassure them that you are going to include them in the process and simply want to be sure their assets are put to the best use.
You’ll want to collect:
- Bank and brokerage account information
- Deeds and mortgage papers
- Insurance policies
- Monthly or outstanding bills
- Pension and other retirement benefits
- Social Security payment information
- Stock and bond certificates
Step Two of Budgeting for Senior Living: Get the family together to discuss putting a financial plan in place.
Talk about your wishes, needs and goals. Assign specific individuals for ongoing financial duties, such as paying bills, managing benefit claims, making investment decisions and preparing tax returns. Discuss the need to avoid over-spending on non-essential items.
Don’t try to cover every topic in one meeting. Give your family members an opportunity to think about their roles and come back to you with suggestions or information.
Step Three of Budgeting for Senior Living: Consult a professional.
A financial advisor and/or estate planning attorney who specializes in elder care and/or long-term care planning can offer you valuable insight into the following:
- Insurance options
- Pension, retirement benefits and personal property that nay be potential income
- Programs in which you are eligible
- Potential tax deductions
- Analyzing investment portfolio with your loved one’s long-term needs in mind
A budget gives you peace of mind.
According to the U.S. Department of Health and Human Services, an estimated 70 percent of people over age 65 will require some form of long-term care services during their lives. Because it’s impossible to predict whether you or your loved one will be one of the 30 percent who won’t, it’s crucial to plan for “what if.” Budgeting for senior living gives you a head start on making an informed decision so that you, or a loved one, can look forward to a safe and happy future.
Engaged in the present AND at peace with the future: Residents at St. Mark Village live a relaxing and carefree life. Contact us or call 727-464-1750 today to connect with our friendly and knowledgeable counselors and learn why so many are proud to call St. Mark Village home.
Learn more about budgeting for senior living: download our Financial Planning for Retirement Living Guide – Everything You Need to Know About the Costs of Senior Living.