Assisted Living Financing Options

Posted by Enlivant Support Center on April 21, 2023

Financial planning for the future is always a good idea. But if the future is already here—and you or a loved one is considering the safety and health benefits of assisted living—what can you do now to ensure your finances are covered? Start with understanding your assisted living costs and options. You can also use our affordable assisted living calculator to estimate expenses. 

The good news is that most assisted living residents and their families have been in the identical situation that you’re in now, and nearly all of them have found ways to supplement their income and pay for assisted living costs. Learn about some assisted living financing options that residents and their families found to comfortably manage their expenses.

Tap into the equity of your home

Most of us don’t think of our homes as more than a roof over our head, but there is equity locked up in yours that can be easily converted to cash. Reverse mortgages are a popular solution: they’re loans for homeowners 62 and up based on the market value of your home. Unlike a traditional mortgage, a reverse mortgage doesn’t require any monthly repayments; its principal and interest are simply deducted after the home is eventually sold, which doesn’t even have to happen in your lifetime. Meanwhile, you receive payments that are entirely tax-free.

To avoid interest rates and receive the maximum value for their property, many choose the most direct route: putting their home up for sale. Working with a real estate professional can keep the process manageable while ensuring you get the best results.

Of course, the real estate market can fluctuate, and listing a home is no guarantee that it will sell immediately. To tide you over while waiting for your home to close, a bridge loan can provide you with ready money for move-in costs and other needs—and can be quickly repaid when the property is sold.

Check for long-term care insurance

If you or a loved one has long-term care insurance, assisted living coverage is usually included. If not, buying long-term care insurance is one way to prepare for assisted living costs. Long-term care refers to a host of services that aren't covered by regular health insurance. This includes assistance with routine daily activities, like bathing, dressing or getting in and out of bed. Considering long-term care costs is an important part of any long-range financial plan. The majority of people with long-term care insurance buy it in their mid-50s to mid-60s. For details about your specific policy, speak with your insurance provider.

Remember to collect veteran benefits

When veterans or their spouses need assisted living care, the Department of Veteran Affairs (VA) has a special Aid and Attendance Pension benefit that can cover some or all of the expenses. 

Surprisingly, only about a third of the people eligible for veteran benefits actually receive them. In part, this is because some don’t know they can apply. Others are rejected because they appear to have too many assets to qualify for the income threshold, but this is often preventable: assets can be gifted to an adult child, who can hold them for the parent. Once assets are no longer in the parent’s name, they can no longer be considered as part of the parent’s income.

This information isn’t intended to be financial advice. Please consult a financial advisor.

For details and additional financial options, explore if one of our communities  is the right fit for you or your loved one.