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When it comes to paying for memory care, there are a variety of financial resources available.
Deciding it’s time to move to a memory care community is a big step in your loved one’s journey with dementia.
This lifestyle change comes with round-the-clock specialized care, a host of amenities, as well as many social opportunities. As one prepares for this next chapter of life for a parent or loved one, you may wonder how to pay for it.
Many financial options exist to fit the needs of any resident’s situation.
At Ganzhorn, we’re here to help guide you.
Our trusted financial experts at ElderLife Financial work with you to determine which resources are available to your loved one and the best options for moving forward. Below, you can learn about some of the financial solutions families leverage to pay for memory care, and get answers to frequently asked questions.
What are the options for paying with personal funds?
As you begin creating a budget for your loved one’s care, it is best to start by having a clear understanding of all personal resources that are available. Over the years, your loved one may have acquired assets, saved money, or purchased insurance policies. They may also have money in a savings account, 401k, stocks, bonds, CDs, or others, which they can draw down on to pay for ongoing care needs.
How can I best leverage the sale of a home?
When a loved one is moving to a memory care community, the equity in their current home may be one of the largest assets to utilize. Working with the right real estate agent to sell the home at maximum value can provide a sum of money to help fund senior living expenses. Seniors Real Estate Specialists® (SRES®) are Realtors® with an advanced certification who specialize in helping older adults sell their homes. During the home selling process, you may realize there are many belongings that are no longer needed. You can also liquidate assets and conduct estate sales so your loved one keeps only what they want, then they can use the additional funds to help pay for care.
What benefits can Veterans get from the VA?
The Department of Veteran Affairs (VA) offers benefits to help Veterans pay for care. The Aid and Attendance benefit is one of these programs and can provide eligible U.S. Military Veterans and their spouses over $2,600 of monthly, tax-free income, which can help cover the costs of their care. Eligibility can be determined in less than 5 minutes by reviewing wartime dates, discharge type, care needs, income, and assets.
What if my loved one has long-term care insurance?
Long-term care insurance is a type of insurance that people buy because they anticipate needing to pay for long-term senior care at some point. These types of policies can also be very specific about what services and care they cover — and what they do not. Review your loved one’s policy or speak with their insurance provider to learn if and how they can use their long-term care insurance policy to help fund memory care. If you’re worried they’re not getting the maximum payouts for care or have questions about their policy, ElderLife has consultants available to help review their policy, at no cost to you.
What about life insurance?
Life insurance is a type of insurance that people typically buy so their loved ones receive a sum of money after the policyholder’s passing. As one ages, life insurance premiums may increase. In some cases, policyholders decide to let their policies lapse because of the increased premiums. Depending on the type of insurance policy your loved one has, they may be able to access funding from it or sell it during their lifetime, which can be used to pay for their care. Not all life insurance policies can be used this way, so it’s best to review the policy to determine if and how the policy can be used to help pay for senior living.
Are there any related tax deductions?
The Internal Revenue Service (IRS) offers tax deductions on some costs related to senior care. Generally, you’re able to deduct certain medical expenses if they are over 7.5% of your adjusted gross income. There are rules on what you can and cannot deduct, but these tax deductions can go a long way. Since the tax rules are complex, it’s always best to consult an accountant or tax advisor. Their expert knowledge may be able to help free up more money to pay for senior living.