Common Questions About Paying For Or Financing Senior Living

Determining the best senior living option for yourself or your loved one and the associated cost can seem intimidating. At Renaissance, we’re happy to help answer some of the most common questions about financing your retirement years. If you’d like assistance in making a financial plan for yourself or your loved one when it comes to senior living, you can always contact us.

Get To Know Your Options

How much does senior living really cost?

The answer depends on quite a few variables – for instance the location, type of care, size of apartment and more can all drive the cost of senior living. According to a 2021 Genworth cost of care survey, the national median costs of care for assisted living services were $4,500 monthly and $54,000 annually. Senior living apartments without care will typically be less costly than assisted living apartments.

Is there financial assistance available?

We can help you determine whether financial assistance is available for you or a loved one. United States wartime veterans can qualify for the Aid & Attendance benefit for veterans and their surviving spouses. This monthly benefit is in addition to a veteran’s regular pension and can help cover the costs of assisted living or nursing care. It is a “pension benefit” and not dependent upon service-related injuries for compensation. Most veterans in need of assistance qualify; however, we recommend that you allow plenty of time for the application process.

If you or your loved one fall below a certain income level, Medicaid may help cover a portion of senior community or nursing home costs. Each state has its own set of regulations for qualifying, so be sure to look into Medicaid assistance specific to Florida.

Is senior living covered by Medicare?

Seniors and their families may be surprised to learn that Medicare does not cover assisted living costs – other than 100 days of skilled services or rehabilitative care for a qualified stay. The services covered by Medicare Part A include hospital stays, short stays in a nursing home for certain kinds of illnesses and hospice care in the last six months of life – all after a standard yearly deductible.

Is senior living covered by long-term care (LTC) insurance?

Depending on the type of policy, long-term care insurance benefits can be applied to the cost of nursing homes and/or assisted living. There are increasingly flexible long-term care policies available that can meet needs ranging from adult daycare to assisted living to skilled nursing, with certain options even paying a family caregiver for in-home care. Premiums may be tax-deductible, and benefits from tax-qualified plans are non-taxable, making this option even more appealing. But it’s also important to know that premiums can be costly and prices increase in cost with age and poor health, so experts recommend individuals begin planning between the ages of 52-64.

Are there other ways to pay?

Most Americans’ most valuable asset is their home – and there are various options for utilizing this option to pay. Many individuals and families first try to pay for nursing home costs with the profits made from the sale of a house, but may also decide to look into other options, like renting the house or using the house to qualify for specialized loans.

Depending on the housing market and other factors, that capital may not be available when the time comes to make the move to a higher level of care. A bridge loan is designed for individuals who need access to funds right away, but are waiting for a home to sell. It’s an interest-only loan that uses the equity of a house to pay senior living expenses until the house is sold. The borrower then pays off the loan with money from the sale of the house.

Often seniors have funds invested in a life insurance policy but find they need financial support while living. In this instance, individuals would ask their life insurance company about “accelerated” or “living” benefits, in which case the company buys back the policy for 50 to 75 percent of its face value. Different rules may apply depending on the company and type of policy. Another option, known as a “life assurance” benefit or life insurance conversion program, allows seniors to convert the benefit of a life insurance policy directly into long-term care payments.

More questions?

If you have additional questions about senior living and how to pay, reach out to us at Renaissance North Tampa so we can provide you with the information you need to make the best choice for you or your loved one.