Are you or your parent starting to consider where they should spend their retirement? The two most common options are aging at home or moving into a senior living community. There are pros and cons to each option and some of the advantages and disadvantages are tied to costs. Is it more affordable to opt for a senior living community or make the necessary changes to accommodate aging at home? The answer to this question really depends on personal circumstances. The cost of aging at home often includes things such as home maintenance, in-home care, delivery services, and adding safety features. If after calculating the costs for aging at home, you decide that senior living may be a better option, you’ll need to determine how to pay for it. Not to worry, there are several payment options to choose from.
Another option for footing the senior living bill is making use of one’s retirement savings or pension. For those fortunate enough to receive a pension, this financing option may be most ideal. Your pension in addition to whatever you have saved in your retirement account can be allocated toward your preferred senior living community. Of course, you don’t want to squander all of your retirement savings in the event that you need that money for something else, but you can take a look at how much you have and determine how much of it can be used for your living expenses.
For seniors who do not have a retirement savings account, a pension, or families that cannot afford to pool their money to pay for senior living, it may be necessary to make use of a loan. There are many types of loans that may be used to finance senior living expenses, including, but not limited to:
- A reverse mortgage
- Only for those 62+
- Must be a homeowner
- Ideal for a senior homeowner who has decided against aging at home –
- A home equity loan
- Must be a homeowner; home serves as collateral
- An older adult’s children may take out a HEL or HELOC against their home to fund their parents’ senior living expenses
- Lower interest rates
- A personal loan
- The most accessible option
- Can be used for anything
- No collateral needed
3. Money Pooling
Older adults may be lucky enough to have adult children or close relatives that are willing to pool their money together to cover the cost of all or part of living in a senior community. Everyone involved should take some time to determine how much they would like to contribute on a regular basis. This will help the senior’s support system determine the best senior living community based on price. It may be helpful to decide whether a different person will be responsible for the payment each month or if each family member will contribute a certain amount on a monthly basis.
Luckily, Eaton Senior Communities offers affordable living options to meet your needs and budget! Contact us today to learn more.