It’s never too early to start thinking about financing memory care. Planning care before it becomes urgent will help you decide what option is best for your loved one and the family.
Caring for a loved one that is suffering from a memory disease is challenging. Not only emotionally but financially as well. Many want to care for their senior loved ones themselves, assuring that they will receive the best care. Depending on how much help is needed, this could be a great plan.
However, most seniors who need memory care need extensive assistance, which takes a lot of time and resources. Being a caregiver can be rewarding, but it can also get expensive and come with hidden costs. Caregivers may have to take time off work, resulting in a loss of wages and leading them to miss out on benefits, rewards, and promotions at work.
Financially and for quality of care, it can be wiser to choose a memory care community. When a senior receives in-home care, they are not always able to receive long-term care benefits. Meaning things that would be covered in a memory care community will not be covered if they stay home.
What are the options for my loved one in need of memory care?
If your loved one requires little assistance and is in the early stages of a memory disease, a family caregiver may suffice. In the early stages, most seniors are still able to function normally and complete daily tasks. They may only need help here and there, with reminders, or getting from point A to point B.
As a memory disease progresses, the amount of help needed will increase. At first, a family caregiver may still want to step up and help out. Eventually, the amount of support a loved one needs may become too much and start affecting you and your family financially.
Family members who provide care can spend thousands of dollars a year providing their loved ones with food, diapers, and other items they may need. In many cases, in-home nurses and physical therapists will be hired, making things even more expensive. One survey showed that 13% of caregivers had to sell their personal belongings, even cars, just to afford to care for their loved ones.
When this happens, a memory care community that offers comprehensive and expert care may be the best option. Here, a senior will receive support, several types of physical and emotional therapy, have opportunities to socialize and maintain friendships, and have a nurse onsite 24 hours, seven days a week.
What are common ways to go about financing memory care?
Discussing financial planning with your loved one and family is crucial. If you can discuss this with your senior loved one before their memory declines, it could be helpful as they will be able to tell you what type of insurance they have, trusts, stocks, bonds, and savings.
Once their memory begins declining, it will be harder for them to remember their assets and help you determine your resources.
If you or another family member decide to be the caregiver of your loved one, you will likely need to dip into retirement funds or savings, on top of reducing work hours or taking leave. In some cases, caregivers will even have to quit their job altogether, as caregiving takes up most of their time.
While being a caregiver is a selfless job, and you and your family may have the best intentions, it can be financially devastating.
If you and your family decide on a memory care community, there are many financial support options. Keep in mind that it may take more than one method to cover your senior loved one’s memory care. One source may just not be enough to cover the intensive care that they will need.
Private Pay Options
Trusts
A trust is a legal entity that shelters one’s assets, such as cash, real estate, investments, and life insurance policies. There are typically three parties involved in a trust, the grantor, beneficiary, and trustee.
The type of trust and trust documents will stipulate how and to whom the assets should be distributed. This could be in the form of annual income paid to the trustee or the beneficiary.
Long term care insurance
Long-term insurance can cover the cost of memory care if it is purchased before care is needed. If your loved one has already developed a memory disease or other chronic illness, they will not qualify for this type of insurance.
The price of a long-term care policy varies, depending on the type and amount of services you want to be included in the policy and how old you are when you buy into it.
The younger and healthier you are when you purchase a long-term care insurance policy, the cheaper it will be.
Reverse mortgages
If your family has decided that your senior loved one will benefit most from moving to a memory care community, you could use a reverse mortgage to unlock the equity of their home.
However, this option works best if a spouse or another family member still resides in the home. This guarantees that the equity income will be tax-free and doesn’t need to be paid back yet as capital gains.
Another option would be to rent out the home, letting your loved one’s equity build and providing extra cash flow.
Bridge Funds
If you or a loved one is in the process of liquidating assets or selling your home, this short-term loan can help pay for expenses.
Applying for a bridge loan is simple and has no application fees or out-of-pocket costs. The credit limit could vary from anywhere between $5,000-$500,000.
Stocks, bonds, savings, property
It is common for many older adults to pay out-of-pocket, using their own money and personal assets. Investments such as stocks, bonds, and savings accounts can be income sources to help pay for memory care.
While these are excellent sources of income, one may also sell their home or other property to cover expenses for additional income.
The cost of treating someone with a memory disease is expensive, making planning ahead and finding several sources of income essential.
Veteran’s aid and attendance program
For those who meet the requirements, such as being at least 65 years old and needing help with daily living, this could help. As of 2020, those accepted could receive around $2,266 a month for elder care assistance.
Memory Care at Kensington Place Redwood City
Finding the perfect memory care community for your senior loved one can be challenging. That’s why Kensington Place Redwood City goes out of our way to stand out from the rest. We offer two memory care neighborhoods that will make your loved one feel comfortable in their new home as we care for their mental, physical, and spiritual health.
If you have questions about Kensington Place, we promise to love and care for your family as we do our own. Reach out to us today to discuss financing and how we can help provide the best level of care for your loved one.