The topic of memory care is typically an emotional subject for both you and your loved one, however, a necessary conversation. If the time comes that your loved one requires assistance from a memory care facility, knowing the different ways you can avoid paying this expense out of pocket is important. Since memory care is a more expensive form of long-term care, most people must tap into their savings to pay for it. The demand for memory care facilities is increasing each year which makes it more difficult to reserve a spot. Being able to have peace of mind in a setting catered to the unique needs of your loved one is a priority. Unlike basic long-term care facilities, memory care living facilities provide specialized care for residents and are trained to deal with the unique issues that often arise because of dementia or Alzheimer’s.
What you can expect out of memory care facilities
- A secure, safe, and structured environment with set routines to lower stress for residents.
- Programs that are designed to help patients with cognitive issues.
- Activities are designed to improve cognitive function and engage residents at different stages of the disease such as dancing, brain games, art classes, and music programs.
- Assistance with basic functions that memory care residents need.
These are some of the features that memory care facilities provide for around-the-clock care and a warm, welcoming, secure environment. Therefore, the supply of these facilities is often limited to reach the demand in most states. Many of you are wondering how to pay for this type of care—let us review a few different ways you can pay for this type of care that might surprise you.
There is a wide range of healthcare services that are provided to veterans depending on their needs. The VA Aid and Attendance program is a benefit designed to help veterans and their spouses that are recipients of a veteran’s pension. This benefit can help with paying for memory care.
To qualify for this type of assistance, a senior must meet ONE of the following requirements.
- Have a cognitive disability that requires much care.
- Needs help with basic activities such as bathing, eating, or walking.
- Must be 65 or older, or your condition leaves you permanently disabled.
- At least 90 days of consistent active-duty services.
- At least one day of active service during a war.
Retirement saving without penalties
If you have a Roth IRA or Roth 401(k) and you are not yet at the retirement age, then you are in luck. This type of plan for long-term care expenses could be the source of how you pay for memory care. Going this route could be tax-free as long as you know the certain rules of the IRS.
Being able to obtain tax-free funds from a Roth IRA include:
- Must have a Roth account for five years.
- Must be at least 59 and a half years old.
If you do not meet these requirements and taxes are taken out, you may be able to remove them yearly. One great thing about your retirement account is that funds are typically easy to obtain. If you are under the age of 59-and-a-half and can show proof of a disability, then you may still be eligible to remove funds and receive a waiver for the 10% penalty.
If you are diagnosed with early-onset Alzheimer’s disease before you are at the age to retire. Then you could be eligible for social security benefits. You would then be able to put that toward your memory care expenses. There are also programs to speed up the process, this is called the Compassionate Allowance program.
Your home is a great asset, in general, using this asset to your advantage can help with paying for memory care.
Ways you can use your home to pay for memory care:
- Sell your home. This is the most common way people use their homes to cover memory care costs.
- Rent your home. If you are not in the market to sell your home, then this is a great way to keep your home while covering the cost of memory care.
- Reverse mortgages. This is borrowing money against your home. The bank with either give you a large amount of money or offer a line of credit. If you are 62 and older, you can convert the equity of your home into tax-free income as long as the home remains occupied. This can assist tremendously with memory care costs.
Life Insurance Policies
Surprisingly, not many people know that their life insurance policy is one of the most valuable assets they own and could be sold for a lump sum cash payout that can be used to cover memory care expenses or any other expense. By selling your life insurance policy, known as a life settlement, you no longer pay premiums. You can find out what your policy could be worth for free by visiting mrefinance.com/get-a-free-estimate. Life settlements are becoming more common with more people needing a way to pay for long-term care benefits. If you do not wish to sell your policy, some policies may allow you to take out a loan if you have enough cash value in the policy, which could be used to cover the cost as well. Be sure to consult with the insurance company about impacts on your policy.
Long-term care insurance is designed for seniors; most families are not aware that their loved ones may be covered. Depending on the type of policy, this insurance typically covers memory care.
Overall, memory care costs are expensive and are increasing in demand. Finding the best ways to pay for these costs while not using up all your savings could be useful. Medicare does not cover memory care but will cover only short-term care in a facility. Medicaid, on the other hand, covers different aspects of short-and long-term care. Having options can put your mind at ease with dealing with times like this. Always remember to consult with professionals to understand your options.