If you have an aging parent, you know the negative impact the recession has had on your aging parent’s funds. Previous projections of “how long the money will last” may have been turned upside down by the recent economic crisis. Your aging parent may be facing one of these 3 situations.
- Your parent may be in assisted living already, but previous projections of “enough money” are no longer valid.
- Or, your parent may have decided to go into independent/assisted living, but now is unable to sell their home.
- Or, your parent may wish to remain in their home, “aging in place”, but find their funds are running out.
I am glad to say I have finally found a resource that is most helpful in highlighting possible options for you and your aging parent. Patricia Grace offers five key funding sources in her excellent 5-part article, “Eldercare Funding Options”.
I’ll briefly touch upon each of the funding sources with my commentary. But, I encourage you to read Patricia’s article in its entirety. My bullet points (below) will highlight why her article is well worth your time.
Five key funding sources for your aging parent:
- Senior Living Line of Credit. This is very similar in nature to the Home Equity Line of Credit that my mother used. But the “Senior Living” line is different in that it is typically unsecured, and enables up to 6 persons to apply together (so the burden is shared among siblings). Loan documents specify that this is for a parent’s housing and care. This is a good option if your parent wants to move into a senior living community but can’t sell their home immediately.
- Veterans Aid and Attendance Benefit. Patricia links us out to an article on the VA site which highlights a number of key VA programs that are not well known. I am direct quoting this because it is so important. “It’s astounding that roughly 1/3 of all seniors can qualify for up to $1,949 a month in additional income through Pension under the right conditions. Pension is also known as the ‘aid and attendance benefit.’ Yet government statistics show only 5% of potentially eligible veterans are actually receiving the Pension benefit.”
- Reverse Mortgage. Patricia links us out to a leading independent resource on reverse mortgages. Check this site out carefully to learn the “facts” about reverse mortgages and how they may help your aging parent.
- Long Term Care (LTC) Insurance. Patricia links us out to an excellent Consumer Reports page. A CR investigation (reviewing 47 policies) concluded that for most people, LTC insurance is ” risky and expensive”. Note from Dale: If your aging parent chooses to go into a CCRC (Continuing Care Retirement Center), it is likely they will not need LTC insurance. This was the case with my Mom. So be sure to check that out! Otherwise, your parent will want to consider LTC insurance Consumer Reports does a thorough job pointing out the risks (will your insurer last; will coverage be sufficient; will you qualify for benefits; what are policy limitations). You don’t want to miss “How to Choose” (when to buy, how to select an insurer/policy, how to ensure policy will cover future costs).
- Life Settlements. Patricia links us out to the web page of the Life Care Funding Group. A life settlement is the sale of a life insurance policy for amount greater than cash value and less than final death benefit. Such a fund can cover costs of retirement or senior living when other assets are hard to liquidate.
As I said earlier, please take the time to read the entire 5-part article written by Patricia Grace. It is a tremendous resource for any of us with aging parents. Thank you, Patricia!
(Source: http://www.examiner.com/x-13909-Senior-Care-Examiner~y2009m8d12-Eldercare-funding-optionsPart-I)
