Paying for Independent Living During Retirement

Paying for Retirement

Retirement Cost – Planning Tips for Paying for Retirements and Care Options

Aging Americans are struggling to cover the expenses for retirement.  Unexpected care expenses tend to be factors when trying to determine where to live.  Services such as hiring in-home care, assisted living, or any other form of long term care options are financially pressing to many. Unfortunately, most people haven’t planned ahead for their senior living care, so paying for independent living during retirement is a problem faced by many people. Retirement cost tend to escalate, and families struggle as to what care options and funds are available.

Arranging Senior Living with Care

Arranging senior living is not easy at all; as a matter of fact, it can be very challenging, stressful, and expensive, especially when you need senior living with personal care like residential care home or assisted living community. That’s why many families are caught in the gap between having low income to qualify for Medicaid and being able to pay for independent living out of their pocket.

Assisted Living Typical Resident Yearly Income

Considering the fact that the typical resident in an assisted living has a yearly income of about $19,000, most people must tap additional resources in order to cover the cost. There are, however, a few strategies you can use to help you find quality senior care that will fit into your budget.

Strategies that can help you find funding for Assisted Living

Long Term Care Insurance

Long term care insurance policy covers assisted living. There are “facility-only” policies which cover care in a skilled nursing facility or assisted living facility. The generic public has hard time understanding most insurance policies, so make sure you know your benefits so that you can get the most out of your independent living. Therefore, you must be very careful when signing up for a policy; make sure you fully understand what it will and will not pay for.

Life Insurance

You can convert life insurance policies into a long term care benefit plan and disburse a monthly benefit stipend that will help you cover the cost for an independent living during retirement. Unlike life insurance, a long term care benefit plan is a Medicaid qualified asset. Life insurance conversion typically pays 15% – 50% of the value of the policy, which is less than a life settlement, but it’s still a good option for lesser-value policies that don’t qualify for life settlement.

Veterans Benefits

Veterans who have served during war time are eligible for financial assistance through the Department of VA that can be used for paying for senior care. Spouses of wartime veterans are eligible as well. Applicants for Veterans Benefits must meet a medical qualification test, while their medical conditions don’t need to be related to their military service. There is another set of benefits, called Aid and Attendance which pays toward the assisted living cost. This set is available to veterans or a spouse whose income is below a certain limit. In order to apply for Veterans Benefits, a veteran must have served a minimum of 90 days on active duty and/or a minimum of one day during wartime.

Selling/renting the home

Some people decide to sell or rent their home which will give them a monthly income that can cover the cost of assisted living. Before deciding to sell your home, you may want to think about renting it to a third party. Whatever your decision is, make sure you’re getting the most value out of it, and needless to say, make sure you work with trustworthy advisors.


Annuity is another good option when it comes to paying for independent living. When purchasing an annuity, you’re paying a lump sum up front and then receive regular payments back over a certain period of time. Annuity helps stretch the budget, so you can be sure that you will always have some money coming in. The amount of money the person receives from an annuity depends on the amount of the investment.

Good and thorough planning is the only way to minimize any financial surprises as you prepare yourself for retirement and the possibility of living in an assisted living.

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