When transitioning into senior living, it is vital to plan ahead financially. This may involve contributions from family members and/or the sale of an investment property. Having a clear financial plan is essential.
Most seniors pay for their senior living community costs with private funds, including income and savings from investments or retirement accounts. In addition, long-term care insurance (LTCI) and life insurance policies can be used to help cover senior living expenses.
Financial Transparency
Awareness of all the costs is essential when considering a senior living community. Be sure to ask about the base fee, additional services, and charges and whether or not those fees can increase over time. Additionally, make sure you know the rate changes (how much and how often they occur) and if the community has any other hidden fees.
Many people choose to pay for their senior living through private funds – often from proceeds from investments, retirement accounts, savings, and inherited money. Depending on your situation, bridge or home care loans can be a great way to cover expenses during the transition into senior living. At the same time, you work out more permanent financing arrangements. Long-term care insurance policies also provide an excellent way to help pay for future senior living expenses.
Talk to a Financial Advisor
When it comes to a senior living decision, there’s more than just cost. Advisors help determine the financial impact of a client’s choices. However, a senior’s quality of life is just as important as their finances.
Many senior living communities include meals, utilities, trash removal, apartment maintenance, and transportation services in their base fees. That eliminates mortgage payments, homeowner’s insurance, property taxes, home and yard care, and other costs.
Saving for retirement is critical, but putting aside enough money when expenses are already rising is often challenging. It’s always possible to start, though. And the younger you save, the more options you’ll have.
Take Tours
Tour communities must be visited once you’ve determined how much your loved one will need to pay monthly fees. You’ll want to make a list of things that impress you and those that give you pause.
Make sure you take note of how staff members greet guests as well as how comfortable the common areas and private rooms are. Eating in the community is also an excellent way to experience mealtime and how it is handled.
Ask Questions
Finances are a significant factor in every person’s life, and they become even more critical during retirement. There are several ways that older adults can save money and pay for senior living costs, including long-term care insurance, downsizing out of their current home, or utilizing state-sponsored assistance programs.
During interviews and tours, ask about the costs of services and amenities a community offers. It’s also important to know what is included in the base fee so you or your loved one can make the best financial decision possible. These conversations can be difficult, but financial transparency makes for more meaningful and reliable planning.
Be Prepared
As your family prepares to move to senior living, it’s vital to assess income and assets, understand what Medicare covers (or doesn’t), discover the best independent living services, and be realistic about the cost of senior care. Creating a financial plan can help ensure that your loved one will get the care they need without having to sell their home or cash in investments.
Understanding what is included (or not) in a community’s monthly base rent can also be helpful. Independent living communities, for example, do not charge hefty entrance fees, so you may be surprised that their services and amenities are more affordable than you think.
Depending on your family’s needs, selling an investment property or personal home may be necessary to generate the funds for senior living and care.
