If you are reaching the age of retirement and in need of long-term care services such as living in a nursing home, you will soon find out one of the biggest issues around this decision is the cost.
Most medical insurance programs offered to seniors do not cover nursing home costs and it will more than likely be paid out of pocket. The costs of nursing homes will vary based on the home, the location, the amenities and other extras they provide.
While researching the perfect nursing home for your loved one, it is important to note the cost of their services and boarding as this may sway your decision more than many other factors. It can be difficult affording a nursing home for yourself or loved one when you are on a fixed income or do not have the proper savings in order to cover the costs; understanding how to potentially lower the nursing home costs can be a great benefit.
Look for Long-Term care Policy
Long-term care insurance is one of the most popular ways to lower out-of-pocket costs for a nursing home. These policies often cover independent living, assisted living, nursing home costs and occasionally home care costs. If you want the lowest possible policy, it is best to enroll in your policy at a younger age. Typically, the younger you are when you get the policy, the less you will pay for it each year but keep in mind you will be paying for the policy for a longer period of time. Look for a long-term care insurance policy that has guaranteed premiums which will not rise beyond a reasonable level, offer nursing home care services and inflation protection for benefits.
Get a Reverse Mortgage Loan
Another option for lowering your nursing home costs are to get a reverse mortgage or home equity loan. A reverse mortgage allows you to receive money off of your mortgage every month from the bank you get this type of loan from, which you can use to pay for the nursing home costs and the loan is essentially paid back after the homeowner dies or the home is sold. Shop around for the best interest rates on your reverse mortgage loan before committing to one and signing the contract. Be sure that after the interest and associated fees, the reverse mortgage payments or lump sum will be worth it and indeed benefit you financially.
If you are a senior and are in need of moving into a nursing home but do not have the funds to cover it, contact your family members for assistance. If your children can help pay the nursing home costs, they will be able to get a tax deduction for these payments and, therefore, end up saving money in the long run which lowers the cost of the nursing home. Eldercare medical expenses that excel 7.5% of an adult child’s adjusted gross income will be tax deductible which can be beneficial to both you and your child who is willing to help pay for the nursing home.