When our senior loved ones are feeling healthy and active, it’s easy to want to push aside conversations about senior living options later on in life. However, this is exactly the time to do it. It’s never too soon to begin developing a senior living financial plan.
Should your loved one suffer a fall, or develop memory loss or a chronic illness later on, having a plan in place means less stress and anxiety during an already difficult time. The COVID-19 pandemic has served as a reminder that when unpredictable events occur, it’s more important than ever to have plans established.
To create a plan, you’ll need to gather information on the best care community for your loved one, types of care, and finance options. We’ll guide you through the steps to creating a financial plan that can offer you peace as you move through life and enjoy your time with loved ones.
When is the right time to start a senior living financial plan?
The time to begin your plan for senior living is now, or at least as soon as possible. Even if you’re not ready to get all the pieces in place, gathering phone numbers of assisted living communities or other caregiver resources is a big step forward. Speaking with a financial planner or accountant also would be helpful.
Senior living decisions can be difficult. It’s important to choose the right options for your loved one, and to establish various steps of care. Will a family member take on more caregiving duties as your loved ones age? Are you willing to have your senior parents live with you, or to hire in-home help? When the time comes for more advanced care, do you have an assisted living community chosen?
Answering these questions with your loved ones now means you’re avoiding the stress of last-minute decision making if they need urgent assistance. It also means everyone can feel more prepared for these changes as they arise, because you all are on the same page and know what to expect.
Use these simple steps as a guide to action:
- Meet with family members and all involved parties
- Choose potential assisted living facilities and other caregiver resources
- Make a list of all expenses and assets
- Consult with financial and legal experts
- Put together your plan
With these steps in mind, read on for common options for financing senior living, how to search for a community, and more tips on creating a financial plan.
What are methods of financing senior living?
When it comes to financing senior living, you have many options. If the costs seem overwhelming, that’s where listing out all your living expenses and assets will help give you confidence and pinpoint where you need to focus. You may find that the monthly expenses of an independent living or assisted living community actually aren’t that different from your current situation.
Remember, even if your home is paid off, there still are utilities, taxes, insurance, security, lawn care, and more. The freedoms you gain from never having to do yard work, perform household maintenance, or shovel snow may be enough of an incentive to move to a community.
Common methods of paying for senior living include pensions, trusts, life insurance, bridge loans, reverse mortgages, and veteran’s aid, in addition to using personal funds and savings.
Reverse mortgages and bridge loans
One of the most common ways to pay for assisted living is by using the equity in your home. Your equity is equal to the amount your home is worth minus any mortgage loans that are due. Many times, seniors who move to an assisted living community have paid off their home. You can either borrow from your equity with a reverse mortgage or sell your home to pay your senior living expenses.
If you want to sell your home before moving to an assisted living community but don’t have time to wait, you can use a short-term bridge loan. These types of loans provide funds immediately while you wait for your home to sell.
Pensions and trusts
Using your retirement funds is a straightforward way to pay for senior living expenses. Additionally, family members can set up a trust fund to pay for long-term care.
Many people are unaware that you can transform your life insurance policy into long-term care benefits. Your policy will be transferred to a third party entity that will act as the administrator, and you will receive monthly benefits. You can use these benefits to pay for senior living.
Eligible veterans may be able to use their benefits or a Veterans Aid pension to help pay for the cost of senior living.
Comparing senior living options and creating a financial plan
Your loved ones have many options today for senior living, including communities such as Kensington Park that offer everything from independent living to advanced memory care.
Independent living is meant for seniors who are in generally good health and want freedom from the demands of homeownership. The Highlands at Kensington Park is an independent living community that resides on an eight-acre campus with three luxury suite floor plans. Residents can focus on doing what they enjoy, while dedicated staff perform all the cooking, cleaning, maintenance, and more.
Seniors who are beginning to require some assistance can find an assisted living community helpful. At Kensington Park, residents each have an individual care plan and a primary care manager. Medical professionals are onsite 24 hours a day. The Kensington team is passionate about keeping residents busy with events and activities, which have been adjusted during COVID-19 to include more one-on-one and virtual activities.
If your loved ones are suffering from memory loss as a result of Alzheimer’s or dementia, they will require special assistance and security measures to ensure their safety. At a community such as Kensington Park, the idea is for residents to truly be able to “age in place” in a community that supports them from independent living to more advanced and end-of-life care.
With independent living, assisted living, and memory care all housed on the same property, your loved ones can comfortably move through the stages of life, supported by dedicated and loving staff. At Kensington Park, our staff promises to love and care for your family, as we do our own.
Once you have decided the type of care and community for your loved one, you can put together a senior living financial plan that works for everyone. Using your financial data and the help of a financial advisor, you and your family can work out a plan for paying for care at every stage of life.
Contact the Kensington Park team today to learn more about what we offer and who we are. We can’t wait to meet you.