How to Pay for Senior Living

All Independent, Assisted Living and Memory Care communities are private pay. Medicare does not pay for these communities, and Medi-Cal may cover residential living for a very limited number of facilities in California.

Besides retirement income such as pensions, IRAs, 401ks, social security, dividends and interest from investments, the options are:

• Long term care insurance (pays about $100 – $300 per day). These policies should be purchased in our 50’s or 60’s. After that they become prohibitively expensive. Some life insurance policies also include a feature to convert from life to long-term care benefits.
• Many people who own a home with significant equity choose to sell or rent their house. If sold, the equity can be invested to produce more dividends, interest and income.
• Choosing to rent your house is another viable option, and the rental income can contribute to the costs of senior living. Do consider the responsibilities of being a landlord carefully.
• Reverse mortgages are also available, but you must live in the home to qualify. It is a viable option if only one person of a couple needs to move to assisted living or memory care, and the other lives at home.
• The Department of Veterans Affairs (VA) offers a program commonly called “Aid and Attendance” that is available to qualifying wartime Veterans and their surviving spouses.  Aid and Attendance is part of the VA’s Disability and Death Pension programs and can provide a significant monthly income to augment the veteran’s current income, making senior living accessible.

I can refer you to financial planners, Long Term Care insurance providers, rental property managers and reverse mortgage companies.

If you decide to sell the family home, more planning is necessary. That may include emptying the home, repairs and staging, a real estate sale and escrow. I always recommend that your loved ones move first and then manage all of this. I know and can recommend all the professional resources you’ll need.