With advancements in medical technology, people are living longer and are left to figure out their own long-term care needs. For older Americans without family able or willing to take care of them in their golden years, the last years of their lives can be tarnished by financial strain.
Assisted living is an expensive endeavor, averaging over $36,000 per year according to the American Living Facilities Association. The association also finds the average annual income of seniors amounts to a mere $27,000. So what exactly are the options besides Social Security to pay for assisted living? Here's two ideas you may not have considered.
If after working hard all your life you now own your own home, you can use the equity to borrow against the collateral. According to the Federal Trade Commission, you have to be 62 years old to qualify for this type of loan. Your house doesn't even need to be paid off in its entirety.
A reverse mortgage is a great option for those who aren't worried about leaving the family home or the proceeds from its sale to their heirs. Here's how it works:
- You keep the title to your home.
- Rather than paying the mortgage each month, the bank pays you.
- The last surviving spouse can stay in the home until they die or also need to go to assisted living. So if one person needs to move to assisted living, the other can still remain in the home without worry.
- When the last homeowner dies, the home is sold and the loan satisfied. Any money left over goes to your estate.
Just like a conventional mortgage, there are closing costs, appraisal fees, and interest associated with a reverse mortgage. The interest rate is typically variable, so the amount you owe may fluctuate over time. Also, the interest is not tax deductible. Be sure to comparison shop with different banks to get the best rate.
Section 8 housing is a federal program administered by the U.S. Department of Housing and Urban Development. In addition to low income families and individuals with disabilities, the elderly are also eligible to apply for assistance.
While the benefit cannot pay for food or medical assistance through assisted living, it will pay all or part of your monthly rent at a senior living facility that accepts the payment vouchers. As it is a government program, eligibility is determined by the applicant's income and assets. Contact a senior living facility like Twin Oaks Estate for more information.