How Do You Pay for Senior Living?
There are several ways to pay for senior living. People typically use a mix of funds from social security, real estate, and savings to pay for senior living rent, which also covers expenses like meals, transportation, and utilities.
As you transition out of the workforce, it’s normal to be concerned about money, but living in a Holiday Retirement community may be more affordable than you think. There are a wide range of senior living options available with varying price ranges and entrance fees.
Continuing care retirement communities (CCRC) or ownership-style senior communities are typically the most expensive, requiring investments sometimes in the hundreds of thousands of dollars. The good news is there are also more reasonably priced independent living communities such as Holiday Retirement, which are rent-based and don’t require such large upfront investments.
Bridge loans are a short-term option often used to ease the financial transition to your new home. These types of loans “bridge” the time gap created when selling your existing home. Specialty providers offer bridge loans to help cover rent and moving expenses specifically for senior living. Once you have sold your home, you can use profits to pay off the loan. Low interest or no interest options are often available to those who qualify. Elderlife Financial is one of these providers.
Income from social security can help cover a large portion of monthly rent in an independent living community. As of February 2020, the average monthly social security benefit was $1,385.47. Of course, the amount of social security you receive will vary based on factors such as your lifetime earnings, number of years worked, and the age you begin receiving social security.
Equity in home ownership often creates a financial nest egg to help cover the costs of living in a retirement community. Seniors may also opt for using a reverse mortgage. This is a loan that borrows against the value of your home, allowing you to receive a line of credit to help with the cost of senior living. Another option is renting your home to generate a stable monthly income while retaining the equity you’ve grown in your home.
Personal savings can pay for all or a portion of your independent living community rent. Personal savings may also include 401Ks, money markets, CDs, and Roth IRAs.
Long-Term Care Insurance
Long-term care insurance (LTC) may help cover the cost of care in older age. Depending on the type of policy, LTC may cover all or a portion of housing costs of certain senior living options, such as assisted living or memory care. If you didn’t purchase a policy in younger years, determining if LTC is worth the potentially high premiums can be tricky. Discuss your options with a professional financial advisor.
Support From Loved Ones
Some seniors receive help from loved ones to make up any shortage in monthly expenses.
We’re Here for You
Deciding how to pay for senior living can feel overwhelming. We’re here to help. Holiday Retirement associates are happy to sit down with you and help you figure out logistics and options. Let’s do this together.
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