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Planning Financially For Senior Living

In a previous blog post, I alluded to the ever-increasing cost for senior living. This is something that should be taken into everyone’s consideration while planning financially. Young or old, it’s never too early to be planning ahead for these expected events. As mentioned before, the expenses for senior living can be anywhere between $3000 to $6000 per month. This means it would be prudent to plan for living expenses of roughly $54,000 in the last years of retirement. Here are some of the best ways to thoughtfully plan for senior livings costs.

Buy Long Term Care Insurance

Setting aside some assets or a portion of income for Long Term Care Insurance is an ideal way to plan for senior care. Long Term Care can have certain tax benefits, allow for preserving more assets, and have care coordinators who can help make sure any loved ones are not burdened with the responsibility. The ideal time to buy this would be in one’s early 60’s. This is a conversation that should be had with a financial planner.

Distributions From Retirement Accounts

During this time of life, it would make sense to begin taking money from any retirement assets, such as old 401k’s, IRA’s and Roth IRA’s. Planning a distribution strategy with a financial planner for tax efficiency is key.

Accessing Home Equity

Many individuals who are planning for their own senior living future have already paid off their house or have significant equity in their house. If not enough assets are had to cover the costs, selling the house, using a reverse mortgage, or a home equity loan can sometimes make sense. Selling the house would give a lump sum and potentially the most money. Taking total control of the funds, they can be used however and whenever it is best decided. The reverse mortgage allows access to the home’s equity on a monthly basis and would potentially allow for the family to keep the home by paying off the balance when it comes to that. Basically, this gives monthly income from the value of the house. However, there is the potential that a “balance” could incur high enough that the home could be given to the lender of the reverse mortgage if the family cannot afford the payoff.

Veterans Benefits and State Programs

There are other options available for those who have not been able to save for senior living. With these programs, some of the conveniences of a fully funded senior living experience will have to be given up, but the care that is needed will still be provided.

I love helping point my customers in the right direction when it comes to planning for Senior Living. If you have questions or need additional resources, do not hesitate to contact me. As a CSA (Certified Senior Advisor), I have the expertise and knowledge to help you make the best decisions for your Senior Living needs.

About the author
Barbara Cheroske


CarePatrol of Chandler/Gilbert

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