Senior Citizen Financial Planning
If you are taking care of your elderly parents or are looking at such a probability in future, you need to be prepared. According to a recent report, over 40 percent of baby boomers are assisting their senior parents by providing financial and personal assistance or both. If you haven’t already thought about financial and long term care planning, the burden will fall on you as the caregiver. Decisions on how care will be paid for, who will manage the estate, and how the long term care will be given can be stressful.
Why Plan Early?
It is important that family members and parents be involved in financial planning for future needs. This is because financial resources can change drastically after the occurrence of illness, stroke, and onset of dementia. To plan financially for long term care, you should first know the costs of services and what they will be soon.
Many retired individuals believe that they have planned for their future properly only to discover later that the rising medical costs, damages to their investments and many other factors have pushed them into debt. This means that most seniors have to skimp on food budgets or forego purchasing medications for them to meet ongoing payments.
Financial planning can be very difficult, considering that you aren’t sure when you will need long term care and for how long it will be needed. However, in some situations, you can determine what will be required in some living situations. You or your aging loved one have worked hard your entire lives and managed your debt. It would have been impossible to anticipate the expensive medical care, rising costs of prescription or depletion of savings. Fortunately, there are professionals that are up-to-date with changes in laws, economy and government programs for seniors. These professionals can handle almost everything from investment advice, retirement savings accounts, estate planning, guidance on government programs and new funding alternatives.
Below are examples of available relief options:
- Life Settlement
- Reverse Mortgages
- Government Programs
A life settlement will enable you to sell your life insurance policy that you own but no longer need for an amount greater than its value. In some cases, it can be 2 to 3 times more than the cash surrender value.
A reverse mortgage also referred to as a Home Equity Conversion Mortgage, is a risk-free option that helps you tap into home equity without having to make any monthly payments or paying back the money during your lifetime. Instead of paying, the funds are reversed, and you receive payments from the bank. Therefore, if you are less fortunate financially but you own a house, a reverse mortgage can help you to remain in your home and get an extra income.
There are some government programs that provide temporary financial assistance for food, medical expenses, and subsidized housing. Some government agencies provide legal help and assistance with Medicare costs as well as individual counseling.