Most of us intend to save for future care needs, but next thing you know the time is here and there’s a gap between what you have and what you need. But don’t worry, there are ways to close the gap in funding senior living. Here’s what to do when you or your loved one haven’t saved enough.
Know Where You Stand
All too often people assume senior living is out of reach if they don’t have a sizable nest egg. But that’s not necessarily true. In fact, you may have more resources for funding senior living than you think. That’s why the first thing you should do is to see where you or your loved one stand financially by considering:
- The House — What’s the market value? Once you find out, consider whether it makes sense to sell or even rent the home for income.
- Savings — Are there any rainy-day funds available? Are there stocks, bonds or annuities that could be put towards senior living?
- Income — Is there a pension? What is (or will be) received from Social Security?
- Taxes – Are there any potential tax deductions that could be beneficial right now?
As you navigate your options here, it can be extremely helpful to consult a financial advisor or an attorney specializing in elder law or estate planning to help you make the best decisions.
Next, make sure you truly understand what you’ll need by taking a look at our previous blog on senior living costs [link to Comparing Costs Between Senior Living and Home].
Quick Ways to Help in Funding Senior Living
Now that you know where you stand and what you’ll likely need in funding senior living, often any remaining financial gap is less than you initially anticipated. That’s great news! As are these quick ways to save:
- Catch-Up on Contributions – You can start making extra contributions to IRA and 401(k) accounts as early as age 50 with a yearly max up to an additional $6,500 for 401(k)s and $1,000 for IRAs according to the IRS.
- Create a Health Savings Account – This can not only help prepare for unexpected medical expenses, but also reduce taxable income. These accounts grow tax-free, and at age 65 withdrawals can begin for qualified medical expenses.
- Wait on Social Security – Yes, benefits can start being collected at age 62, but most financial advisors recommend waiting until age 70 instead in order to dramatically increase the monthly benefit.
- Decrease Spending – Start by taking a look at automatically renewing subscriptions and memberships that aren’t used or needed as well as entertainment and dining expenses plus cell phone and cable expenses that could be reduced. You might also consider going off-brand when purchasing groceries and personal care items; the products are often comparable for much less.
- Check Your Benefits – There may be some savings options that you aren’t even aware of. For example, Aid & Attendance is a benefit for qualified wartime veterans or their surviving spouse that can help in funding senior living. Also, look at benefitscheckup.org through the National Council on Aging to quickly check thousands of state and local programs.
You can always talk to us! We’re here to support your family as you consider senior living and would be happy to answer any questions you have.
For more information download our Family Guide to Funding Senior Care & Housing or call (224) 333-6247 to speak to a team member.