As your loved one gets older, they may need to move out of their home and stay in an assisted living facility. This option will allow them to receive the medical support they need and day-to-day support with meal preparation, exercise, and healthcare. An assisted living home can also take the burden off of you as the caretaker. You will be less likely to experience caregiver burnout from supporting one of the people you care about most.
Even if you cannot pay for the assisted living expenses up front, you can still get the support you need. Here’s what you need to know about the average cost of elder care and how you can finance it.
What Is the Cost of In-Home Care for the Elderly?
If you are looking for extra support for your loved one, consider hiring in-home support. This allows your older relative to age in place, where they can feel safe in their home environment. The median cost of in-home assistance is around $4,385 for home health aides.
Your monthly costs will depend on your location, the level of care your loved one needs, and the number of hours your home health aide works. You can expect to pay more for someone to provide constant care as opposed to part-time assistance a few times a week.
What Is the Cost of Nursing Home Care for the Elderly?
On average, Americans pay nearly $8,000 per month for a semi-private room in a nursing home facility. They pay around $9,000 per month for a private room. Costs will vary from one facility to another and will also depend on the amount of care your loved one needs.
Many independent living facilities support active seniors who just need extra help. These facilities have weekly excursions and classes to accommodate a variety of interests. On the other end of the care spectrum, nursing homes and dementia or Alzheimer’s care units will support your loved ones if they cannot walk, feed themselves, or go to the bathroom on their own.
How Can You Pay for Assisted Living With No Cash on Hand?
As you review your elder care options and the costs associated with them, know that you have multiple financing options. Here are a few common programs you can take advantage of, along with personal loan opportunities.
Covering Assisted Living Costs With Medicare
Medicare does not cover long-term stays in assisted living facilities or nursing homes. However, it will cover the doctors’ services and medical supplies that your loved one needs. If your aging relative moves into an independent living community but still has frequent medical treatments and consultations, these appointments will be covered by Medicare.
Even without Medicare, you have other long-term care options. Your doctor or a social worker may be able to help you with subsidized older adult housing, community-based services, and hospice.
Covering Assisted Living Costs With Medicaid
Medicaid covers the cost of multiple types of assisted living, including memory care units for patients with Alzheimer’s. Each state decides what is covered by Medicaid and the benefits that you are eligible for. Research your specific location to learn about your care. Some of the services that Medicaid usually covers include:
- Personal care (dressing, bathing, using the toilet, and eating);
- Homemaking (laundry, dishes, meal preparation, and shopping for essentials);
- Transportation;
- Nursing and care services;
- Emergency response.
The main thing that Medicaid does not cover is room and board for assisted living. This program can cover a lot of your expenses but there may be a few gaps that you need to fill in.
The Medicaid website also says that different states refer to assisted living by various names. You may see terms like adult family care, alternative care facilities, or board and care homes in your research.
Covering Assisted Living Costs With Social Security
If you are at least 62 years old, you may be eligible to receive monthly Social Security payments. This money is free to use as you please. Many older Americans use their Social Security checks to cover the costs of their assisted living care.
While Social Security can be a helpful tool when paying for assisted living, the money usually doesn’t cover the entire cost. It can significantly reduce your monthly assisted living bill, but you will still need to find ways to pay off the rest.
Covering Assisted Living Costs With VA Benefits
If the loved one who needs assisted living served in the military and is eligible for benefits from the Department of Veterans Affairs (VA), they may be able to take advantage of programs to cover their care costs. VA benefits can provide support for in-home healthcare, nursing homes, assisted living facilities, and adult daycares. Assisted living support is part of the standard health benefits offered by the VA.
Your loved one may need to meet certain requirements to receive VA benefits. This usually includes being honorably discharged after serving for a certain period.
Using a Personal Loan To Cover Assisted Living Costs
If you do not qualify for the programs mentioned above, or need extra assistance to support your loved one, look into unsecured personal loans. These loans are based on your credit history, which reflects your likelihood of paying them back on time. If you have a high credit score, then you might get favorable loan terms.
The average person stays in assisted living for two to three years, so you will want to make sure your loan is large enough to cover this extended stay.
Using a Home Equity Loan To Cover Assisted Living Costs
Home equity loans and home equity lines of credit (HELOCs) allow you to pull equity from your home. If you have fully paid off your home, think of it as accessing cash by taking out a mortgage. If you currently have a mortgage, you can still take out a home equity loan and adjust your monthly payments.
Lenders will allow you to borrow up to 80% of your equity. If your house is valued at $500,000 and you have $100,000 left on the mortgage, then your equity is $400,000. Your borrowing power is around $320,000.
The main drawback of this option is that you may have a higher mortgage payment or will have to start making mortgage payments because of the HELOC.
Using a Stock Loan To Cover Assisted Living Costs
You can also look into secured loans, which allow you to borrow money using your existing assets as collateral. For example, stock loans allow you to borrow against the publicly traded shares that you own. Instead of selling your stocks, you will use them as collateral and retain ownership of the shares. This could be a good option if you need financing but are not ready to divest yet.
Secured loans also offer favorable rates because the lender has an asset they can claim if you do not pay it back. This means your stock loans could be more affordable than unsecured options. Use our stock loan calculator to estimate your loan size and see if it is enough to cover your loved one’s assisted living costs.
The care and comfort for your loved one as they enter the final years of their life should be your top priority. Take advantage of the programs and loan options mentioned here to cover any care costs.
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