Financial Tips for Seniors - LCB Senior Living, LLC

The perceived high costs of assisted living can be intimidating to many, and often deter seniors and loved ones from making that first call to an assisted living community and delaying what could be a hugely beneficial change. However, many seniors find that in addition to savings and Social Security Benefits, creatively tapping into resources across their assets helps. Long-term-care insurance, the sale of a home, and financial support from relatives can help offset the costs associated with assisted living. We’ve researched a few additional resources that can help:

  • Veterans Benefits Can Fund Assisted Living. If a senior or a spouse is a veteran, in many circumstances veterans benefits can be used to pay for residential care. The Aid and Attendance benefit is available to any veteran or surviving spouse who’s disabled and whose income is below a certain limit. Those with service-related injuries or disabilities are eligible for another type of benefit. To find out more and determine your eligibility, you’ll need to go through the Veterans Administration. Many senior living communities offer assistance navigating this system, which can be an overwhelming and confusing process, but a worthwhile one nonetheless.
  • Home Loans Can Provide Lines of Credit. Seniors who wish or need to keep a home in the family should consider looking into home equity loans or lines of credit. In addition, a line of credit is a great resource for seniors to consider before selling their home, while waiting for veterans benefits, or even before long-term care insurance kicks in. The first step is to determine if you have available equity in your home. Lenders will permit you to borrow up to 85% of the value of your home minus the amount you owe. Other considerations include your credit score, monthly income and monthly debts. Working with a bank that offers low setup costs and processing fees will help conserve even more cash.
  • Consider the Value of Life Insurance. If a parent or adult child has been paying for a life insurance policy for ten or more years, you can tap into the policy’s cash value. Borrowing from the policy and withdrawing what you paid in premiums will help to avoid paying taxes. Alternately, if you choose to cash in the policy, regular income tax will be owed on everything but the cost basis. Withdrawing up to your cost basis and then borrowing the rest is a strategy that works well for some seniors. Always check with your financial advisor to learn what might work best for you or your loved one’s individual situation.
  • Look Into a Reverse Mortgage. Another option for seniors who own their home outright or only have a small monthly payment is something called a reverse mortgage. Available to seniors 62 and older, this arrangement enables the borrower to access the value of their home, using the equity of the home for cash. Unlike a traditional mortgage, a reverse pays out loan proceeds from your home’s equity. Reverse mortgages work best when one parent needs assisted living but the other can remain in the home. Take care to read the fine print, however, as a reverse mortgage is not for everyone, and interest and fees can use up a substantial portion of a homeowner’s equity. To learn more about reverse mortgages visit the HUD website.