April 1, 2021 —By 2050, over a fifth of the United States population will be 65 years or older. As the elderly population continues to grow, so does the need for high-quality assisted living facilities.
Currently, 7% of the elderly population needs help with personal care. Assisted living facilities offer the opportunity for higher levels of comprehensive care in a home-like environment.
When first considering making the change to an assisted living facility, a frequent question asked is, “what is the best way to finance assisted living?”
While there is no one-size-fits-all approach to financing, there are many options available for seniors. Here are a few common approaches to assisted living financial planning.
Option #1: Personal Savings
It’s no surprise that one of the most straightforward approaches to financing assisted living is to utilize personal savings.
Personal savings can come from different resources such as income from stocks, 401(k) plans, and IRAs.
Before considering dipping into your savings, make sure to speak with a financial advisor to ensure that you have the necessary funds for a long-term stay.
If personal savings aren’t an option, there are still other alternatives to consider.
Option #2: Bridge Loans
A bridge loan is a kind of short-term loan that seniors often use as they transition into senior living.
Bridge loans help “bridge” brief gaps in funding and are interest-only. Interest-only loans tend to have lower monthly payments than standard loans because standard loan payments include both a portion of the loan balance and the interest.
When to utilize a bridge loan:
- You want to move to an assisted living community but you need to sell your house first or you don’t have the immediate funds to move.
- You’re waiting for veteran’s benefits to kick in but need funding in the interim.
Option 3: Veteran’s Benefits
There is another resource to consider for veterans: the VA Aid and Attendance (A&A) pension. The A&A pension is for veterans over the age of 65 who require help with their daily care.
This special type of pension can be used for skilled nursing, in-home care, and of course, assisted living.
Some examples of potential A&A eligibility use cases include:
- A single veteran in need of daily care (age 65+)
- A veteran and his or her spouse (ages 65+)
- The surviving spouse of a veteran (age 65+)
There are many free resources senior veterans can utilize to get the help they need. VeteranAid.org, for example, offers guidance on eligibility requirements and the application process.
Plan for your future
There are a lot of different routes to consider when looking to finance assisted living. The most important consideration, of course, is what’s best for you or your loved one.
Fortunately, with the proper plan in place, transitioning to assisted living can be an affordable and rewarding experience.
Need more information about planning for an assisted living experience? Contact The Admiral at the Lake at 773-433-1801 or schedule a remote, virtual (or in-person) tour below!