Paying for future senior care and housing expenses are a legitimate and significant concern for older adults. The U.S. Department of Health and Human Services reports that adults aged 65 and older have nearly a 70% chance of requiring long-term care services in their remaining years.
In addition, the costs of health care and long-term care are expected to continue to increase.
According to Consumer Affairs, the need for long-term care is expected to double by 2030. The aging baby boomer population’s increased life expectancy, and an increased risk of injury and disabilities as we age, contribute to the increase in costs.
Senior care and housing costs can put a strain on the retirement plans of many seniors.
However, there are ways for seniors to cover these costs without risking their financial futures.
Let’s look at some funding sources for senior care and housing.
Home Equity
Your home is most likely your most significant expense and greatest asset. Using your home equity is an excellent way to pay for current or expected senior care and long-term housing expenses.
For many older adults, having a large home is no longer a necessity. Retirement is the perfect time to consider downsizing and simplifying your lifestyle.
There are several ways you can use the equity in your home to fund senior care and housing expenses:
- Selling your home and eliminating expensive mortgage payments, maintenance expenses, and taxes will free up resources to help fund senior care and housing expenses.
- Renting your home is a perfect way to keep your beloved family home while generating income to help pay expenses.
- A reverse mortgage loan uses part of the equity on a home and converts it into cash to help cover senior care and housing. A reverse mortgage has specific eligibility requirements, so make sure you understand the requirements of a reverse mortgage before choosing this option.
- An estate sale can help you get rid of items you no longer need and frees up additional money for senior care and housing.
Life Insurance Policy Conversion
In addition to death benefits, a life insurance policy can be converted into a long-term care benefit plan.
You can turn the value of your life insurance policy into a pre-funded financial account that disburses monthly benefits to help pay for long-term care and skilled nursing.
Make sure you discuss the pros, cons, costs, and benefits with your financial advisor and insurance professional before converting a life insurance policy.
Health Savings Account (HSA)
An HSA is an investment and savings account that complements high deductible health insurance plans. These plans can cover copayments, expensive dental procedures, medical equipment, and more. Funds from an HSA roll over yearly, allowing them to accumulate in value.
HSAs aren’t usually the first thing seniors initially consider when looking for ways to pay for senior care and housing expenses, but if you’re lucky enough to have contributed to an HSA, these funds are a smart way to help with expensive health care procedures, and long-term care communities.
About Notre Dame Health Care
Notre Dame Health Care (NDHC) offers a range of post-acute programs and services to the community, including an Assisted Living Residence; Adult & Pediatric Hospice and Palliative Care; Post-Acute Recuperation; Short-Term Rehabilitation; Skilled Nursing and traditional Long Term Care; Specialized Memory Care; and an educational resource center which serves our employees and community. We embrace the individuality, spirituality, and wholeness of each member of our community, including our residents, patients, families, volunteers, and staff.
Notre Dame Health Care is proudly non-profit and honored to carry on the mission of the Sisters of Notre Dame de Namur to care for the sick and vulnerable and to educate for life through our NDHC Educational Bridge Center.
Notre Dame Health Care
555-559 Plantation Street
Worcester, MA 01605
(508) 852-5800
notredamehealthcare.org