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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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Published on September 17, 2018

How Being Smart With Your Money Leads to Financial Success

How Being Smart With Your Money Leads to Financial Success

Achieving financial success is not something that just happens. Maybe if you win the lottery or something, but for the average person like you or me, it comes from a series of small steps you take over a long period of time.

With each step, you form a new smart money habit. And with each smart money habit, you build towards financial independence.

So what sort of habits can you form to get on that path? Let’s take a look at smart money habits you can start today to get you closer to a financially independent future.

1. Avoid being “penny wise but pound foolish”

It’s tempting to try saving a couple cents here and there when buying small items. However, that’s not where the real money is saved. You’re putting in extra effort for something that doesn’t move the needle.

You get the most bang when you’re able to cut down on your bigger bills. For example, finding a lower interest rate for your mortgage could save you $50+ per month. And cutting your transportation bill by purchasing a cheaper car or taking public transportation can provide large gains as well.

So, look at your recurring expenses such as housing, transportation, and insurance, and see where there’s wiggle room. It’s a much better use of your time than trying to pinch pennies here and there on smaller purchases.

2. When you want something big, wait

Impulsivity can get you in trouble in most aspects of life. Finances are no different.

It’s human nature to see something and want it right then and there. It starts as a kid in the checkout line at the grocery store, and it continues on through adulthood.

We get an idea in our head of something we want, and it’s hard not to go out and get it right then.

A good example is wanting a new car. Perhaps you’ve had your car for several years. It’s crossed the 100k mile mark. Maybe maintenance is due, and you’re annoyed that you need to replace the timing belt or purchase new tires.

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So, you get the itch.

You start digging around online, and you realize you could trade in your current car for something newer and more exciting… all for a few hundred bucks a month. Then you get obsessed.

Here’s where you have to take a step back.

Your newfound obsession is clouding your judgement. Rather than giving into the impulse, wait it out.

Set a timeframe for yourself. Maybe you come back to the decision three months down the road. See if the obsession lasts.

It might, but often, a funny thing happens. Often, you forget about it. And often, you find that the new car wasn’t a need at all.

The impulse faded. And you just saved yourself a ton of money.

3. Live smaller than you can afford

You finally get that big raise. And you want to celebrate – and why not?

You’ve been looking forward to this forever. And after all, it was all due to your hard work.

That’s fine, splurge a little. However, make it a one-time deal and be done.

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Don’t get caught in the trap that just because you’re now making more money, you should spend more.

Too often, people get more money and feel like they that gives them the means to buy a bigger house, a bigger car… you know the drill. Resist.

The fact is that living smaller than what you can afford is one of the fastest ways to build savings.

But if you constantly upgrade as you begin to make more, then you’ll never get ahead. You’ll just build up more debt along the way and have just as little wiggle room as before.

4. Practice smart grocery shopping

Food… it’s one of the biggest portions of any budget. And if you’re not careful, it can be one of the biggest drains on your wallet.

But luckily, there are a few things you can do to ensure that you stay smart with your money when buying groceries.

Create a grocery budget

Set a strict weekly grocery budget. When you know how much you can spend on groceries, you can then plan your weekly menu around it.

Once you know what all you need, you can go shopping and keep a running tally as you shop to ensure you’re on track.

I tend to do this in my head, rounding for each item. However, writing it down as you go would probably work best for most people.

Make a list… and never deviate

Never go to the grocery store without a list. If you go to the store with a ballpark idea in mind, you don’t have a true ide of what you need.

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You’re not well-researched. You don’t know what the sales are. As a result, you’re going to make decisions on the fly.

These impulse decisions will lead to overspending, which will derail your grocery budget.

Eat before going grocery shopping

It’s also important to eat prior to going to the grocery store. Hunger is a powerful force.

If you’re shopping on an empty stomach, everything is going to look good. In particular, you may find a lot of ready-made, processed snacks will look enticing.

After all, you’re hungry now and that food is easily available. So subconsciously, you may lean towards those items.

Unfortunately, not only are those items typically less healthy, but they’re likely more expensive. You pay for convenience.

However, when you eat prior to shopping, then you’ll shop with a clear mind. Your hunger won’t cloud your judgement, influencing you to make poor decisions like a cartoon devil resting on your shoulder whispering in your ear.

This makes it much easier to stick to your grocery plan.

5. Cancel your gym membership

Now that you’re all set on your food, it’s time to get smart about managing your budget in terms of physical fitness. And let’s begin by avoiding the gym. The gym bill, that is.

The average gym membership costs around $60 per month. That’s $720 a year.

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Yet, two out of three gym memberships go unused. That means two-thirds of people who have a gym membership are literally giving away almost a thousand bucks a year. It’s crazy!

I recommend seeking an alternative. One good alternative is to look into fitness streaming services.

Streaming services allow you to stream hundreds of workouts like Insanity and p90x, right in your own home for around $10-20 a month. That’s $40-50 less a month than the average gym membership.

Of course, then there’s the free option. The internet is full of free workouts that you can do on your own with minimal or no equipment.

For example, there’s the Couch to 5K program, that I personally used a decade ago to ease myself from couch potato to running my first 5K race. If I could do it, anyone could.

Then there are free resources like reddit that have limitless information on workouts. The Fitness subreddit has done all the research for you, populating workout tips and detailed workout routines for anyone to use in their wiki.

There are several routines that require no equipment. And you can join in on the subreddit to become part of the community, making it easier for those seeking comraderie and encouragement in their fitness goals. All for free.

It’s baby steps… And baby steps can start now!

I’ve never met anyone that can’t stand to be a bit smarter with their money. And on the flip side, anyone can get smarter with their money. But remember, it doesn’t happen all at once.

Begin by fighting your impulses. Prepare for the week and be smart at the store. And cut monthly expenses like gym memberships that are overpriced and you probably aren’t getting your money’s worth out of anyway.

The devil is in the details. And the details can change your lifestyle and prep you for a financially independent future.

Featured photo credit: Unsplash via unsplash.com

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