Financing Long-Term Care: What You Need To Know

Your plan for long term care is one of the most important decisions you’ll make in your golden years, and finances play a big part in that. That being said, making a financial plan for long term care can be a daunting prospect. After all, there are a lot of unknowns and variables to account for—such as how long you’ll need to be there, and your care needs might change over time.

Moreover, senior care these days comes in a variety of different forms—from independent senior living to nursing care to memory care, and everything in between—and all those options come with different offerings and price points. Balancing your needs and desires for long term care against your finances can be tricky, so taking a systematic approach and considering all of the financial assets at your disposal is essential. Here, we’ll walk through a few of the most important things to consider, as well as some potentially helpful financing options.

Step 1: Determine Your Priorities and Do Your Research

When it comes to creating any kind of budget, an essential part of the process is figuring out what you’re willing to sacrifice, and what things are non-negotiable. For example, if staying close to family or friends is important to you, you might be willing to pay more for location at the expense of other factors.

It’s also important to consider the different types of payment structures available to you. For example, some retirement communities offer a flat monthly fee that includes a certain number of services or amenities, while others charge add-on fees in addition to your base monthly rate. Still other communities charge entrance fees that may vary wildly in amount.

Finally, while predicting the future is difficult (to say the least), it’s important to at least make an educated (and honest) guess about what your needs will look like in the long-term future when working on your long term care financing. If you know that dementia or Alzheimer’s runs in your family, it may be prudent to make sure that the living facility you’re considering offers memory care.

Many individuals find Continuing Care Retirement Communities (CCRCs), also known as Life Plan Communities, attractive because they offer residents the ability to transition between different levels of care depending on their needs. For instance, Seabury offers a series of different living and care options, from independent living in cottages and villas to more supportive assisted living and nursing care. By allowing yourself the flexibility to transition to a different type of arrangement within the same facility, you’re saving yourself the potential expense of having to move and switch facilities, as well as saving money by ensuring that you don’t pay for more supportive care until you need to.

Step 2: Explore Financing Options

The cost of senior living can vary wildly. Depending on your needs and location, independent living facilities can cost as little as $1,500 a month, while the price for more care-intensive assisted living facilities can run as high as $10,500 per month. Similarly, there’s an equal amount of diversity when it comes to options for financial planning after retirement. These include:

  • Private Funds and Investments
    For people who have been able to save and/or invest a large amount of money over the course of their lives, it may be possible to pay for all or most of their assisted living costs out of pocket.
  • Long Term Care Insurance
    Long term care insurance helps to cover the costs of aging, and can potentially cover anything from daily personal care in your own home to nursing facility costs. As with any insurance plan, the coverage will vary depending on the provider and plan you have, so be sure to do your due diligence in figuring out the best option for you. Moreover, if you’re considering getting a long term care insurance policy, you may benefit from doing it sooner rather than later. Individuals who are over a certain age or have pre-existing health problems may not qualify.
  • Federal Aid
    For qualifying individuals, federal aid programs may help to defray or even cover the costs of senior living communities. Medicaid is available in many places for people under a certain income threshold, or who have run out of their own personal resources. However, since Medicaid is administered on the state level, availability and eligibility may vary widely. For veterans, additional resources and benefits may be available through the Veterans Benefits Administration.
  • Life Care
    Some senior living communities offer life care plans, which can be an extremely beneficial and economical option for some individuals. Under a life care arrangement, residents are guaranteed living accommodations and appropriate care at no additional cost, even if their needs increase in the coming years. There’s often an entrance fee and application process that assesses the individual’s health and financial status. Seabury’s life care plan offers residents the comfort and peace of mind of knowing that their future needs are taken care of—no matter what.Seabury also offers an in-home Life Care model called Seabury At Home. This option is designed for people who prefer to age in the comfort of their own homes, while also enjoying the assurance of knowing that any future care needs will be taken care of. New Seabury At Home Members pay a membership fee (similar to the on-campus entrance fee) and complete the same application process. However, instead of living on campus, they continue to reside independently in their own homes, aided by professional, compassionate home health services.

Step 3: Have a Backup Plan

No matter how much forethought and effort you put into your plan for long term care, things happen. In the event that your financial plans fall through, it’s always a good idea to have a contingency option, whether that’s an agreement with relatives or another fallback. The Seabury Charitable Foundation is designed to do exactly that for our Residents. Its mission states that any Resident who, through no fault of their own, finds themselves unable to continue paying for care will be provided for through support from the Foundation.

Seabury provides peaceful living opportunities for adults ages 50 and older looking for fulfilling, independent lifestyles. Our philosophy centers the physical, emotional, and spiritual wellness of our residents. Living options range from independent apartments and villas to cottages as well. Our continuum of care model is designed to make residents’ lives as comfortable as possible. Your Life Plan Contract at Seabury, should you require it in the future, also includes a transition to assisted living, memory support, and nursing care services for the same monthly fee.  Contact us today for more information!