Your aging parent needs to move somewhere where they can get senior care. Not around-the-clock care, just a few hours a day. Maybe get some help managing their medications daily. Or have their meals prepared for them. Or have someone else do their laundry. Or get a bit of assistance with their personal care each morning.
The trouble is, you’re not sure they can afford it.
Before giving up on the idea, here are a few possible funding sources you might want to explore.
Senior care and housing may be more affordable than you think when you consider all the funding sources available to you.
Paying for senior care – possible funding sources
- Your parents’ home. What proceeds will come from the sale of their current home? If their place is rented out instead of sold, what rental income could it generate?
- Their savings. Have they put away rainy day funds in a bank account? Do they have stocks, bonds or annuities?
- Their income. Do they receive Social Security or a pension? Are they paid dividends from stocks and bonds? Do they have rental properties that generate rent income?
- Veteran’s benefits. Do they qualify for or are they receiving the Aid & Attendance benefit?
- Long-term care (LTC) insurance. Do they have a policy that will pay for some costs?
- Life insurance conversion. Does it make sense for them to convert a life insurance policy into a Long-Term Care Benefit Plan that provides a monthly income?
Budgeting for senior care
While every family’s circumstances are different, there are three general steps you should follow in budgeting for senior care and housing. This will help you assess each possible funding source.
Step 1: Gather and organize financial documents
- Bank and brokerage account information
- Deeds and mortgage papers
- Insurance policies
- Monthly or outstanding bills
- Pension and other retirement benefits
- Social Security payment information
- Stock and bond certificates
Step 2: Get the family together to discuss putting a financial plan in place
Get your parent to talk about their wishes, needs and goals as well as how to handle ongoing financial duties such as paying bills, managing benefit claims, making investment decisions, and preparing tax returns.
Step 3: Consider consulting a financial advisor and/or estate planning attorney
Try to pick someone who understands elder care and/or long-term care planning. You’ll want to discuss the following with them:
- Insurance options
- Pension, retirement benefits and personal property that may be potential income
- Programs your parent is eligible for
- Potential tax deductions
- Analyzing investment portfolio with your parent’s long-term needs in mind