Baby Boomers everywhere are struggling with how to help Mom and Dad when they can no longer live safely at home by themselves, but aren’t yet in need nursing home care.
The Centers for Medicare and Medicaid Services reports that at least 70% of people over age 65 will require some sort of long-term care support during their lifetime. Such assistance encompasses homemaker services, home health aides, adult day care, assisted living and nursing home care.
Independent retirement communities typically offer a range of care options that residents can move through as their health needs change. While virtually no one expects Medicare to pick up the tab for independent living, those considering the next phase--assisted living—may be caught off-guard.
Independent and assisted living options are all private pay. Medicare does not cover them. The resident foots the bill, even for assisted living where some level of medical care is provided.
Assisted living facilities provide varying degrees of assistance with personal care and medical needs for those who don’t yet require a nursing home’s constant care. Assisted living is not an alternative to a nursing home, but is itself an intermediate level of long-term care.
The time when you or a loved one needs assisted living is not the time to start figuring out how to pay for it. Financial planning discussions should include the costs along the long-term care continuum. Whether it’s through asset accumulation, selling the family home or long-term care insurance, area experts offer suggestions on how to afford assisted living if and when it becomes necessary.
Some assisted living residents arrive at the facility directly from their own home. Others shift from independent living to the assisted living units in the same community.
For assisted living, people enter as early as their late 60s and early 70s. It’s more typical to see them when they’re in their late 70s and early 80s, though. The biggest reason they wait is that they don’t want to think about it.
People should not be surprised that these facilities want to know your financial situation or that they ask for bank verification. They’re determining how long you can afford to live there. That’s something everyone involved should want to know.
Preparing for the expenses
Some senior citizens might think a reverse mortgage could fund assisted living. However, borrowers must maintain the property and keep the property taxes and insurance current. Equity can be tapped by several methods, but, you can’t strip out the money and move. Usually if you move out of the house you’ve violated the reverse mortgage loan provisions.
Those who anticipate a future need for assisted living should look into long-term care insurance. It has evolved through the years and today most comprehensive policies cover a variety of home, community-based and facility care, including assisted living. Policyholders must meet qualifying guidelines to receive benefits up to the amounts delineated in the policy.
LTC insurance options narrow with age. As you approach 60, that’s definitely the time to be looking seriously at this. Ask earlier if you have a history of Alzheimer’s. You can live a long time with a cognitive impairment.
The inevitability of aging and long-term care needs can highlight vulnerabilities in a financial plan. The averages show a person needs about two years of home health care and will spend three years in an assisted living facility.
Knowing the averages, financial planning becomes a question of odds. Do they want to save now for the chance they’ll need to cover some long-term care expenses themselves? Do they want to prepare for a 10-year stint or the five-year average? Do we want to start even earlier if they want an independent living option? Once they decide, we put together a game plan.
Whatever the specifics surrounding assisted living funding, aging parents and adult children need to communicate. Sometimes the kids must be the initiator. There’s no doubt this can be a tough nut to crack. But elder care needs require a plan. The conversation should also make the grown children think about their estate planning needs, too.
For more information on assisted living care, contact Spring Arbor.