There are over 52 million senior citizens in the US today. That number will swell by more than 40 million over the next several decades. While a percentage of seniors will remain in their own homes, you may find yourself planning around options like assisted living.
If you’re like many people, much of your thinking centers on the problem of finance for assisted living. While social security will help pay for some of the costs, it won’t cover the average yearly cost of $48,000.
If you’re planning ahead, learning your options for assisted living financing is the smart thing to do.
Consider Your Housing Options
Before you commit yourself to a financial plan, you should consider your housing options. For many seniors, home care makes more sense initially. It lets you stay in your home and reduces overall costs.
Independent living communities offer another option for seniors with limited medical care needs. You join a community of other seniors with the cost typically coming in around half of full-blown assisted living.
Assisted living provides you with more substantive help, such as meals, laundry, personal care, and moderate medical assistance. For example, staff members may help you manage medications.
In terms of paying for assisted living, the best finance tip is for you to start saving now. In fact, the earlier you start, the better off you’ll end up later. You won’t get any help from Medicare, so you’ll want money socked away specifically for assisted living.
As an adjunct to that, consider putting in the maximum allowable contributions for your retirement accounts. On average, those deliver far better results than the interest paid on a basic savings account. A combination of personal savings and retirement account payouts can go a long way toward putting assisted living into reach.
Other Financing Options
You can also explore a few other options for saving money on assisted living. You can get a long-term care insurance policy. These policies help pay part of the monthly premium for your stay.
Many of these policies include clauses or exclusions, so make sure you understand the terms of the policy before buying.
If you own property, you can also explore reverse mortgages. A reverse mortgage pays you a lump sum based on your property’s equity. If your family cannot repay the borrowed amount, though, the lender takes possession of the property.
This option works best if you don’t plan on leaving the property to anyone in your will.
How Finance for Assisted Living? Plan Ahead
The best way you can finance for assisted living is to plan ahead. Start your saving program as early as possible. The sooner you start, the more you’ll have on hand when you need it.
Put as much as you can afford into your retirement account. Ideally, start maxing out your contributions in your 30s and 40s. That’ll give you much larger payouts when you move into retirement.
You can also look into long-term care insurance and reverse mortgages if you’re getting started late.
Sholom specializes in elder care with a loving environment for the Twin Cities area. For questions or more information, contact Sholom today.