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How to Pay for Senior Care

How to Pay for Senior Care

The cost of senior care is prohibitive for many older Americans. Nursing home care or a stay in an assisted living facility has become necessary for maintaining their medical needs and quality of life. But they’re unable to afford the cost of such expensive facilities. To ensure financial assistance in your senior years, proper planning is essential. There are various resources seniors can use to help defray the expenses of senior care.

Medicare Benefits 

Medicare is usually available for short-term stays in nursing homes and transitional care facilities. Medicare benefits have a time limit; it is designed to provide temporary assistance until you’re able to get back on your feet and back in your own home. However, they can be useful in providing the necessary interim financing, until other options are available.

Medicaid 

For seniors with restricted income and few assets, Medicaid is the ideal option for paying nursing homes, home care or other forms of assisted living. Medicaid is also available for individuals who have income or assets that exceed the limits. This additional income has to be sent to a trust that is dedicated specifically to their personal care. You may want to consult a Medicaid expert in your state to find out more about your eligibility.

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Veterans Programs

If you or your spouse served as a member of the armed forces, there are resources in place that can help provide for the later days of your life. Some veterans benefits, like the Aid & Attendance Housebound benefits, come with a higher asset and income limit than many other programs. Contacting your local Veterans Office is the best way to get started on this journey, as the people there will be able to help you get the information you need. If you are aware that benefits due to you are being denied, be persistent in making calls till you find the answers you seek.

Non-Medicaid Government Assistance 

Many states offer their own non-Medicaid assistance to help seniors pay for their nursing home care. These programs may include managed long-term care waivers, assisted living programs, and many more. Other programs provide in-home assistance to elderly individuals who are hoping to live in their own homes for as long as possible. Still others provide specific care for those with dementia, like Alzheimer’s patients.

Non-Profit Assistance 

There are many non-profit programs that offer assistance in paying for the medical care of individuals who need nursing homes or assisted living care. Non-profit nursing homes usually offer paid care on a sliding scale based on income and asset ratios.

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Private Health Insurance 

Most private health insurance plans don’t automatically include the cost of long-term medical care. With careful forethought and planning, however, you can acquire a rider for your policy that will help cover the cost of nursing homes or assisted living facilities. The key to this type of insurance is to take the policy well before you really need it.

Life Insurance 

When you take out a life insurance policy, you usually intend to use it to help cover those final expenses that you don’t want to burden your loved ones with. Some life insurance policies, however, come with an Accelerated Death Benefits rider that can be used before you die. Choosing a policy that will pay out either: A) a portion of your death benefits or, B) the full amount of the policy, will allow you to use those funds to offset the cost of long-term care.

Annuities 

Annuities are a great source of income during those senior days. Even better, you can sometimes withdraw money tax-free from the annuity to help pay for long-term care. There are several types of annuities, and in general, the holder of the annuity can choose to make a single payment or a series of payments to the insurance company.

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Long-Term Care Insurance 

This very specific type of insurance is designed to pay for long-term care as you get older. This coverage can be purchased as a separate LTCI policy or be added as a rider on your existing life insurance policy. The earlier you add this rider to your insurance policy, the less expensive it will be. But, not all LTCI policies are created equal, so be sure to check out all the fine print to ensure that the plan fits your needs.

Bridge Loans 

Bridge loans are designed to provide one lump sum immediately when you need it. As a long-term care payment option, bridge loans are only efficient if you anticipate a large source of income — for example, the sale of your home, to cover the cost in the near future.

Reverse Mortgage 

A reverse mortgage allows you to draw money out of your house value without having to sell it outright. This is a great way to pay for short-term care in a nursing home or assisted living facility. This method also allows you to continue to draw on that money long-term, giving you a source of income throughout the rest of your life.

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Private Payment 

Private payment for senior living choices like a quality nursing home is the best option for many individuals. It allows you to choose your nursing home based on your needs rather than leaving it to the mercy of programs like Medicare, Medicaid, or any other organization.

No one really wants to think about the need for long-term care, either for themselves or for a loved one. Unfortunately, as life expectancy increases, the need for long-term care goes up along with it. Planning wisely for future medical needs is a critical part of ensuring that both you and your loved one are well cared for, when that time eventually arrives.

Featured photo credit: huffingtonpost.com via i.huffpost.com

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Last Updated on March 4, 2019

How to Use Credit Cards While Staying Out of Debt

How to Use Credit Cards While Staying Out of Debt

Many people will suggest that the best thing to do with your credit cards during these tough economic times is to cut them up with a pair of scissors. Indeed, if you are already in huge debt, you probably should stop using them and begin a payback strategy immediately. However, if you are not currently in trouble with your credit cards, there are wise ways to use them.

I happen to really love my credit cards so I will share with you my approach to how I use mine without getting into deep financial trouble.

Ever since about 1983 when I got my first Visa card, I continue to charge as many of my purchases as possible on credit. Everything from gas, groceries and monthly payments for services like my cable and home security monitoring are charged on credit. Despite my heavy usage, I have maintained the joy of never paying any interest fees at all on any of my credit cards.

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Here are some tips on how best to use your credit cards without falling into the trap of paying those nasty double-digit interest fees.

Do Not Treat Credit Cards as Your Funding Sources

Too many people treat their credit cards as funding sources for major purchases. Do not do this if you want to stay out of trouble. I use my credit cards as convenient financial instruments so I do not have to carry around much cash. In fact, I hate carrying cash, especially coins. When you buy things on credit, the purchases are clean and you will not get annoying coins back as change.

I do not rely on my Visa, MasterCard or American Express to fund any of my purchases, large or small. This brings me to my golden rule when it comes to whether I will pull out any of my credit cards either at a retail or online store.

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I never purchase anything with my credit cards if I do not have the actual cash on hand in my bank account.

If I really cannot pay for the item or service with cash that I already have at the bank, then I simply will not make the purchase. Remember, my credit cards are not used as funding sources. They are just convenient alternatives to actual cash in my pocket.

Make Sure to Always Pay Off Balances in Full Each Month

The next very important part of my overall strategy is to make absolutely sure that I pay the balances in full each and every month no matter how large they are. This should never be a problem if the cash has been budgeted for my purchases and secured in the bank. I have always paid my full balances each month ever since my very first credit card and this is why I never pay interest charges.

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Using Credit Cards with Rewards

Most of my credit cards are of the “no annual fees” type, including one MasterCard on a separate account I keep at home as a spare in case I lose my wallet or incur any fraudulent charges. However, I do use a main Visa card which does have an annual fee because all purchases on that card reward me with airline frequent flyer points. For me, the annual fee is worth it since I do travel and I get enough points to redeem many free flights.

You have to decide for yourself if you will charge enough purchases on credit each year without paying interest charges to warrant a credit card that rewards you with airline points (or other rewards). In my case, the answer is “yes” but that might not be the case for you.

I occasionally use a MasterCard or American Express card on small purchases just to keep those accounts active. Also, I have been to the odd retailer that accepted only a certain type of credit card, so I find that having one from each major company is quite handy. Aside from my main Visa card which earns the airline points, the rest of my cards are of the “no annual fees” variety.

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So this is how I use my credit cards without getting into any financial trouble with them. This strategy is recommended only if you are not in debt, of course. In fact, it is worth keeping in mind once you’re out of debt so that you can keep your credit cards active and treat them responsibly.

What are your credit card usage strategies? Let me know in the comments — I’d love to hear what methods you use.

Featured photo credit: Artem Bali via unsplash.com

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