Latest / Aging Parent TrapX / How to Pay for Assisted Living
Transcript
- Allison: I ⁓ That's people are worried about, don't you think? ⁓ Outliving their money. That's exactly what people worried Nikki Flynn: Outliving their money, one hundred percent. Julie Cook: for it. Allison: ⁓ ⁓ ⁓ to the Aging Parent Trap X podcast and YouTube channel. I'm Alison Newland, the broker owner of Platinum Properties of Florida in the Greater Tampa area. ⁓ am here with my two friends Julie Cook with Generational Transitions and Nikki Flynn with Elite Preparation Services. ⁓ we just got done talking about ⁓ is the real cost of ⁓ for our senior family members. What's the real cost of it? ⁓ Independent living, living. memory care and we touched on some numbers then how do you pay for it? How do you plan to pay for it? And it's scary. It is so scary. ⁓ know I'm a little bit nervous. I I'm the one in charge of ⁓ ⁓ you know my mom make sure that she has funds available to pay for her assistant living care ⁓ we're you know squeaking by and I've got some big decisions to make ⁓ you that's what we're talking about today. There are a lot of different options We have some good ones here and Nikki was just ⁓ about ⁓ a couple actually. Nikki Flynn: Yes, there's there's a couple of options. ⁓ unfortunately, like for both of us in our situation right now, we're already in the midst of it. Where our parents are already needing the care. We weren't able to plan for it and we're not in the interim stage of the the bridging to what might happen. so for us, it's kind of like okay, we have to just see what we have and try to get it to stretch as long as we can. Because what we don't want is we don't want to have to place the burden on our shoulders to financially foot the bill for it and take care of it. Cause I mean, we have our own families. We have our own things right now. And it's it's that, like you said, it's the bridge right now. We're we're in between those generations where we're still keep taking care of our family, but yet our parents are needing our help as well. So we're burdening ourselves with, yeah. Allison: Right. The sandwich the sandwich generation, Gen X and the s sandwich generation. Nikki Flynn: So it's, you know, what do we do? So looking at options as far as what income there are, are there pensions, are there CDs, are there investment accounts, ⁓ IRAs, ⁓ 401ks, anything like that where you can turn them into income for life. So if you are ahead of the game and you're like, nope, I'm gonna be proactive. I really need to start thinking about this. This is where you can start planning that decision, whether you're in your 40s and you're like, okay. I want to make sure because we're going through this, I don't want this to happen to me, to burden my kids. So I want to make sure I have more than enough money put aside where you can start putting money into annuities and have different types of riders on them or life insurance policies that have riders on them that will allow you to take money to pay for assisted living care if that is needed. So when you have those of ⁓ the policies available to you. Then it's like, ⁓ we're not stressing. We're not going through what we're going through right now. Like I'm struggling. Am I going to make ends meet? I have to figure out and do I need to take out a loan? You won't have to worry about that because the writers will take care of it, the policies will give you income for life, and you will have complete flexibility to be able to cover those costs and not have to worry about so you can afford that Cadillac of facilities and be so comfortable and happy. Which in turn makes us happy because we want nothing but the best for our family. So it kind of does a dual purpose. So there's a lot of options out there, but for the ones that are in the heat of it, we just have to sit down and see, okay, what are our options? Like you and I were talking about with your mom's plan. You kind of gave me a rundown of what she has, what policy she has, what her overall cost is. And I'm going to look at that for you and I'm going to see what is available for you. What options do you have? Allison: Yeah. Nikki Flynn: So maybe we can see if there's some relief that we can get you, what kind of policies we can get for her. But there's some family members that don't even know that those things exist. And that's why we are doing this. We are trying to educate people. Allison: Right. Well, I feel like I'm flying by the seat of my pants now. As much preparation as, you know, I think she did you know, long term care policy, that was a really smart, ⁓ know, purchase that she did a long time ago. because helps, you know, take ⁓ half the burden of the payment ⁓ away. but then the bound you know, ⁓ the social on top of that doesn't cover the whole And then there's incidentals. And then I'm we are using if you're listening to this podcast and watching on YouTube, then you know that you know we try to rent out the house to offset ⁓ the assisted living, I think is a great idea, ⁓ if somebody doesn't have a pension, doesn't ⁓ have ⁓ a amount amount of cash on or resources or investments or you know, just basic, very basic, limited amount that if you can continue to cash from an asset that you have which happens to be a house, that's great option ⁓ because the is that ⁓ if sell the house she'll outlive the money that she gets from the house. Because it's not it's not a two million dollar house, it's a modest house. It's a three hundred and something thousand dollar house. I don't we know, we don't have a crystal ball, right? ⁓ I'm not wishing something bad happens to her. But I'm scared that she might outlive the resources that she has. And I mean, talk about Medicaid. People say things about Medicaid. You get confused. Medicaid, Medicare, what's the difference? All of that. Who you know, covers what? If go Medicaid, that's a bad thing and you might not even qualify for it, but somebody ⁓ tries talk you into going that direction and ⁓ could hurt you. Nikki Flynn: Yeah, that's a Medicare is something that we pay into from the moment we start working. And that gives us when we turn 65 and older, or if you have a special condition where you are able to qualify it for it beforehand, it gives you insurance. So when you are a senior, you have Medicare that you are given because you've paid into it for your whole life. So Medicare is just you paying that with an additional monthly premium that you still will have to pay. It's not just I'm 65 and I'm skating free. That's another thing that they don't understand. There is a monthly premium they will have to pay. So they pay that monthly premium, unfortunately, and every year it goes up $226 this year. So it's it's creeping up. They get a cost of living raise in their social security, but it never covers that. so they are they have to understand that Medicare is a privilege that is given, but it does not cover that wonderful window. Of assisted living or independent living or anything like that. That is self funded. Medicaid is government assistance. They have to qualify for that. They cannot have any more than $2,000 per month to their name. Some people's Social Security is over that, which then immediately disqualifies them. They can't qualify for it. But there are certain qualifications where, if they are needing to go into a facility, Allison: Right. Nikki Flynn: That $2,000 will go towards the facility and then Medicaid will step in and pay the remaining balance. So their social security they no longer get. So it's not like, I'm I'm going into a facility. So that $2,000 is mine now because Medicaid's going to pay for everything. No, no, no, no, no. That $2,000 goes towards it and then Medicaid pays the remainder. So and you have to qualify for it. So if you do have a house, Medicaid will put a lien on the property because why should they take care of everybody for free? They need to recoup the money. And that is why we have to do planning. We have to be strategic with things. That is meant for people who really don't have anything, who don't have other options. The government needs to step in and help take care of them. It's not just a free ride because people don't want to spend their money and they want to, you know, save everything for their kids. That's that's not how this works. Allison: Right. Julie Cook: Yeah, what Nikki's saying is true. the Medicaid benefit is, I think it's important that we discuss that because unfortunately I run into seniors every day who have no assets. ⁓ never purchased a home. They may or may not have a car. And so they're needing assisted living help. And now they're really in a bad situation because all they have is Social Security. So in the state of Florida, Medicaid will help with assisted living expenses. It's correct. They don't pay for everything. You don't get to keep all of your Social Security and they pick up the tab, but it does help. And so that's important to know if you have a family member who may be, you know, we're talking about six, $8,000 a month and you're thinking that's not even anywhere on the table. There are options that are less expensive. Medicaid will help cover a portion of it, but it's a tight squeeze, but it's an option. And so I think it's important to know that it is an option. Allison: What about benefits? ⁓ have a lot of veterans out ⁓ that know you ⁓ your vet veteran benefits, that's a whole nother ⁓ that's a full job. If you did not if you were in time and ⁓ like my husband ⁓ desert storm, right? Got out ⁓ minus tw early was it not a career. military person, ⁓ ⁓ did ⁓ I he a lot hearing loss, he has different things. They were breathing in that black smoke forever, right? ⁓ but he didn't think anything about it in his twenties. ⁓ And now in his fifties, he's like, shoot, he started the journey of trying to get his benefits. ⁓ I think maybe back in 2017, and is not rated yet. He is rated. But I do you have to be fully rated to be able to go to one of the veteran ⁓ facilities for senior kids? You have to be a hundred percent. Nikki Flynn: Mm-hmm. Well, no, you don't have to be 100%, but you're gonna have cost expenses to it. And the level of care is gonna be dependent on the the availability of your disability rating. And that will also affect what insurance you get. So there is additional insurance that they can qualify for that will help that bridge that gap in between there, but they have to have that rating done. Allison: Uh-huh. Nikki Flynn: And it is so difficult to get the rating done because we're talking about how many hundreds of thousands, if not millions, of our veterans are out there that are needing help, that they have a small handful of people that actually do the ratings to get them qualified for these benefits. So it takes a while. Allison: It it it is it is it's very that's a whole n you know, that's a whole nother thing. It is literally you can go to the can go, you can apply for the stuff and they deny, deny it's rubber stamp denial ⁓ and over again until the veteran gets ⁓ yeah, and they get frustrated and then they just give up. ⁓ that's the hope, I believe, ⁓ know, ⁓ then but then thankfully have Nikki Flynn: Mm-hmm. You have to keep appealing. Mm-hmm. Yes. Allison: Some resources where my husband can pay for a private doctor to give a diagnosis. But people don't even know that that's the game that's being run to get the the 100% rating even get close to it. ⁓ and there's you know tax savings involved with that, you know, you get a hundred percent rated ⁓ as veteran, you ⁓ you have property taxes anymore, and that might not even be a thing in Florida going forward. That's a another thing, but Nikki Flynn: Mm-hmm. Allison: Yeah, that that that's a whole another conversation. But I had on my notes like veteran benefits, if that was 'cause there are veteran ⁓ veteran very close by in Lando Lakes, Florida, there's a veteran ⁓ nursing home. I don't know how many beds it has. ⁓ I don't if your spouse can always go with you ⁓ or not. it you know, it's a senior facility and I'm not ex exactly sure what services they offer there, ⁓ honestly, and good is the care. I don't know. ⁓ Ugh. Julie Cook: there. Nikki Flynn: I do know that they won't separate the seniors. So there there will be an extra cost for the the spouse. just like when you do the burials. ⁓ when you go into a veteran facility. I I ⁓ know this firsthand from dealing when my father passed away, ⁓ when you go into a veteran memorial center, ⁓ will handle everything for the veteran free of charge, full nine military honors, all of that. But the spouse will always have an additional fee. Same thing with the facilities. They don't want to separate them. Allison: Uh-huh. Nikki Flynn: They want to keep them happy. They want to keep them together. Julie Cook: And the other thing to consider is veterans do have a benefit called aid and attendance for veterans who served wartime and their spouses where it will go towards assisted living. There is an approval process, but that is something that a lot of veterans don't even know is an option. If they're looking at assisted living that the VA will help cover some of those expenses. Allison: And is that ⁓ for facilities that are not facilities? It could be like the facility where my mom actually is or my father in law. ⁓ Julie Cook: Yes, I've not, I don't believe I've ever run into a community that would not accept the VA benefit. Yeah. Most very, very open to because they promote most communities you walk in and there's a wall right away, a wall of honor voting their veterans. So yeah, that aid and attendance benefit is very, very common and a great benefit for veterans who've served. Allison: Interesting. There is. Nikki Flynn: I don't think they could build enough facilities for veterans alone. Like there's just there's just too many. Allison: I don't think they could either. But I yeah, I don't I don't I don't think they could either. So, ⁓ is there a point in time that you guys know about where some it's just too late to get long term in care insurance that's affordable? I mean Nikki Flynn: Yeah, when you start looking into once you're after sixty, then it starts getting really, really expensive. And at that point, it's like, let's sit down and figure out what assets you actually do have and talk about what other options. Because when you're 60, 65, that's when the policies start getting extremely expensive. And then it's like ⁓ probably double to triple what a normal premium would be. Somebody in their forties. Allison: What does extremely expensive mean? What I mean w Nikki Flynn: their early to late 40s is probably going to be the cheapest you will ever be able to get the policy. Allison: So like a hundred dollars a month? I mean Nikki Flynn: we're talking probably closer to like three four hundred but depends on the yeah well yeah for someone in their 40s you're looking at about one 150 but it depends on the carrier like you have and then what additional payments what level of policy that you want so ⁓ those all just Allison: For for someone in their forties. Ish. ⁓ okay. Yeah, of course. The length the length of time that it'll pay out, all that kind of stuff. Yeah. Nikki Flynn: But that's why you look at so it's it's a conversation. Just like with estate planning, insurance planning is a conversation. What are your goals? So it's not just, ⁓ long-term care, set it and forget it. No, maybe long-term care and a life insurance policy with a writer. So we don't have that running out stage. So yes, we'll exhaust the long-term care policy. We're gonna, we're paying for it, we're gonna max it. We're gonna get everything we can for it. And then let's also look at a long term care or a life insurance policy with that writer for long term care in there. So that way we have that extra cushion so we don't have to stress. Allison: Yeah. Yeah. There's lots of lots of things. Now there's also, you know, I mention area of expertise is talking about the house. ⁓ you have to sell the house, you know, and then you take the the money from the house to to offset the care. You know, that that was your big asset that you lived in for forty five years. so many times, the ⁓ Gen Xers ⁓ the aging live ⁓ somewhere else. now you know, mom and dad have to go to assistant living, maybe they're going to live with you, whatever, you know, it may be you have to sell the house. That's I help with. and can refer people to to renting the house. But then ⁓ and only gonna just mention these words like ⁓ a of credit ⁓ against asset. that's what I'm personally looking at. I'm not a mortgage broker. I'm not a financial person. ⁓ I'm just sharing my personal experience with you in terms of that. I'm looking into that option, tapping into some of ⁓ equity of the house ⁓ ⁓ mom owns to help pay for her care. you having a cushion because I don't like being running along that line all the time. ⁓ And also ⁓ I part of ⁓ I listen I was ⁓ on webinar ⁓ about mortgages. Now I'm not sold on that whole thing because it scares me to death like ⁓ you're giving away the home. Like ⁓ I ⁓ You get a monthly payment of some sort, but then like what happens when the person passes? Do they get the rest of the equity in the house? Like, you gotta be careful with that. And I have seen parents I I talked to my friend actually last week. I was having a little ⁓ lunch with her down in the Fort Myers area, ⁓ she said that her mom took out a reverse mortgage without her knowledge and it just caused chaos because when she passed away. Nikki Flynn: Mm-hmm Allison: She had to deal with that whole thing, but she found out. She's like, ⁓ yeah, I took out a reverse mortgage to do this other thing. And she's like, Mom, She's like a financial planner person, and her mom didn't even talk to her about this. So it was crazy. And she's an only child. ⁓ Her mom should have talked to her about it. ⁓ If you have any questions about anything that we talked about today, ⁓ make sure you look at the below for our contact information. If you're listening to us on the podcast, ⁓ there is a link to the YouTube channel. Thanks for watching.