Although none of us want to think about the idea of moving into a nursing home, it’s something that most seniors have to come to terms with at some point in their lives. The biggest concern most seniors have when preparing to move into a nursing home is how they are going to pay for it. Older folks realize that their Social Security checks aren’t going to cover everything in most cases. Here’s some advice for seniors planning to cover nursing home costs with their Social Security checks.
Preparing to pay for nursing home costs
Preparing to pay the cost of living in a nursing home causes most seniors a great deal of stress. When you are living on a fixed income and or limited savings, it’s natural to be nervous about it.
All you need is a solid financial plan to help you cover the costs. One thing to keep in mind is that while your nursing home costs will be substantial, you will still need money for other things as well. In other words, you can’t just throw your entire life savings or entire Social Security check at nursing home costs. If you do that, you won’t have enough money to pay for other things. The point of living in a nursing home is to help you live safely and comfortably without putting yourself at risk.
Life in a nursing home can be a lot more exciting when you have extra cash to spend on things that you enjoy. The key to preparing to pay for nursing home costs is to write down the amount you will need to pay and add it to the amount of money you typically spend on yourself every month. That combined number should be your goal. In other words, you need to plan to pay for your nursing home costs in addition to your monthly expenses.
Before going into detail on how to raise the money you’ll need, you need to know more about the difference between Medicare and Medicaid.
Understanding the difference between Medicare and Medicaid
One thing you will need to understand before moving into a nursing home is the difference between Medicare and Medicaid. Medicare will not provide assistance towards the costs of living in a nursing home. That’s because Medicare is a national health insurance program. This means that you will not receive any financial assistance from Medicare to pay for nursing home costs. Medicaid on the other hand will pay to cover nursing home costs. If your loved one doesn’t have Medicaid, you should help them apply for it as soon as possible. Ideally, you should be approved for Medicaid before you move into a nursing home. Of course, this is not always feasible. In any case, it’s best to apply for Medicaid as early as possible. If your senior loved one has been stalling on the application, try helping them fill out the paperwork and get the process started. Seniors with limited finances can’t afford to wait to file a Medicaid application. Once they are living in a nursing home, they will need to be able to pay for it.
How much will your Social Security checks cover
If you are planning on covering your nursing home costs with your Social Security checks, you’ll need to supplement that money with something else in order to pull it off. For those of you with older family members planning to use their Social Security checks, you will need to go over some things with them.
First of all, while Social Security checks can make a dent in nursing home costs, they’re generally not substantial enough to cover all of the costs. The average Social Security check amounts to $1,470 per month. Although this might seem like a healthy amount, it doesn’t go very far when used to pay for nursing home costs which can average a whopping $7,350 per month! This leaves an average of $5,880 out of pocket remaining. Coming up with that kind of money every month can be very challenging for seniors.
To illustrate just how taxing nursing home costs can be, consider the following scenario. If you have $100,000 in savings and put your Social Security checks towards nursing home costs, you would only be able to afford to live there for 17 months. Keep in mind, while you can apply your Social Security checks to nursing home costs, you are not obligated to do so unless you have Medicaid. This means that if you have other means of covering these costs, you can keep the money from your Social Security checks and spend it as you wish.
How to raise money to pay for nursing home costs
The first thing most seniors do to raise enough money to move into a nursing home is sell their house. Selling your house can set you up with a substantial amount of money to put towards your nursing home costs. You can also use the money you raise from selling your house to pay for memory care costs.
Although selling your house is an effective way to make a large amount of money in a short period of time, it’s not for everyone. Although it is unlikely that you will be able to return to your house after moving into a nursing home, selling it might not be the best option for you. For example, if you were planning on granting the property to a child or relative, then selling your home may not be an option.
One of the smartest ways to raise money to pay for nursing home costs is to sell your life insurance policy instead. Many seniors have already discovered the financial advantages of a life settlement. With a life settlement, you can afford to move into a nursing home without selling your property. This means you can grant your property to whomever you wish without having to worry about how to pay for your nursing home costs. Even if you have already sold your home, selling your life insurance policy is a smart way to generate cash.
Is selling your life insurance policy the right decision
After paying premiums for life insurance for many years, you might be wondering if it would be a mistake to sell your policy. In most cases, there are no major disadvantages to selling a life insurance policy. Most seniors are unaware that their life insurance policies may be one of the most valuable assets they own next to their homes. By selling your life insurance, you receive a lump sum cash payout that is always higher than the cash value but less than the death benefit. You may have to pay a nominal portion of the proceeds to cover long-term capital gains taxes. If you’re confused about how to go about selling your life insurance policy, MRE Finance can help you navigate the process with ease. Once you have sold your life insurance policy, you will be able to rest easy living in a comfortable nursing home without having to worry about how to pay for it all.
How MRE Finance can help
If you want to know more about how selling your life insurance policy can help you pay for your stay in a nursing home, you’ll want to talk to MRE Finance. We have a team of trained and trusted professionals to answer any questions you may have. We can help you get a great offer for your life insurance policy, it’s what we do!
You can use the free life settlement calculator online and see if your life policy has value in minutes, or simply pick up the phone and give us a call at 1-800-521-0770.
Find out how MRE Finance can help you with a life settlement to help cover nursing home costs!