Many people have concerns they won’t be able to afford the retirement lifestyle they desire or the care they might eventually need. However, this is often because they don’t realize there are many options available to fund senior living.
At St. Mark Village, we understand that making the move to senior living is a big decision, and we want to help you get all the information you need.
How to fund senior living: consider your options
Home equity loans
Sometimes called a “second mortgage,” a home equity loan offers access to a large sum of cash drawn from the equity in your home. If you’re looking at very costly care for a severely ill parent, home equity lines of credit from multiple sources—you, your parent, a sibling or two—could be your best option. You’ll have to pay the money back, so budget accordingly.
Your parent’s estate will have to repay a home equity loan that wasn’t paid in full. So, if you’re counting on a hefty inheritance, talk to an estate attorney about how a loan might change things.
Selling a Home or Other Property
For many older adults, their home is their nest egg and one of the most popular ways to fund senior living is by selling that home. This option is only viable if there’s no spouse left behind who needs to live in the home. It could also reduce the value of your inheritance and may be emotionally difficult for your loved one. There are Senior Real Estate specialists and transitional specialists to help you stage the house and get the most money out of the sale.
In addition, bridge loans are used to “bridge” the time gap created when selling your existing home. Specialty providers offer bridge loans to help cover rent and moving expenses specifically for senior living. Once you have sold your home, you can use the profits to pay off the loan.
Download our free guide: Senior Living Options – A Guide for Understanding Which Level of Care is the Best Fit.
VA Aid & Attendance benefit
Wartime veterans or a surviving spouse with limited income may be eligible for receive a non-service-connected pension (above the basic pension) to assist in paying for assisted living, home health care, adult day, care or skilled nursing.
To be eligible, you must meet one or more of the following criteria:
- You need assistance to perform daily living tasks, such as bathing or eating.
- You are bedridden, and must remain in bed when not undergoing medical treatment.
- You are a nursing home resident due to a mental or physical disability.
- You have a visual impairment that renders your eyesight to 5/200, or your visual field to 5 or fewer degrees.
You may apply for Aid & Attendance or Housebound benefits by writing to the Pension Management Center (PMC) that serves your state. You may also visit your local regional benefit office to file your request.
Long-term care insurance
Long-term care insurance is an excellent way to fund senior living funding, because a small investment over time pays off in the form of affordable care. If you’re still relatively young, consider investing in long-term care insurance now. If the senior in your life needs care now, but doesn’t have insurance, insurance is no longer an option.
Life insurance policy settlement
It may be possible to sell a life insurance policy through a process called “life insurance settlement.” You’ll most likely get less than the value of the policy but significantly more than surrendering or abandoning the policy, and the purchaser will take over premium payments. The value of a policy generally has to exceed $50,000 but the process is quick—usually under 30 days. The monies are put into an irrevocable trust that makes payments to the community. Families can set aside a certain amount for inheritance and decide how much to allocate for care.
One option to fund senior living that many people do not know about is a reverse mortgage, which is a type of home equity loan reserved for seniors 62 and older. Unlike traditional loans, borrowers don’t have to repay the money until they move and sell the home. So if one parent still lives in the home, or if you’re considering in-home care, this might be a viable option. If your parent never sells the home, the estate will have to repay the loan. Otherwise, the borrower may be able to take possession of the home.
Senior living could be the best decision you’ll ever make
It’s good to be excited about what lies ahead, learning new things, trying new experiences, reimagining what is possible. That’s how senior living at St. Mark Village can make you feel. Here, you are part of a loving family that inspires you to enjoy all the perks of carefree senior living, including a plan that offers seamless access to future care options.
We’d love to tell you more!
Senior living focused on the whole person. Download our free guide: Senior Living Options – A Guide for Understanding Which Level of Care is the Best Fit. Or contact us. We’d love to hear from you.