July 12, 2016
How to Pay for Assisted Living Costs in Michigan
Assisted living costs are likely to be one of the biggest expenses of your retirement years, but there are ways to prepare.
During your retirement years, one of the biggest expenses you’re likely to have is paying for assisted living and long-term care costs. In fact, after taking some time researching the pricing structure for some of the assisted living communities in Livingston, Oakland or Wayne County, you might find yourself wondering out loud just how you’re going to be able to afford it all.
For some ideas on how to pay for assisted living costs, see the suggestions below.
Start Saving Now to Pay For Assisted Living
If you’ve yet to start your retirement savings, now’s literally the time to start. Every day that you delay opening a retirement savings account is another day that you’re missing out on the robust effect of compound interest. So start today and make your catch-up contributions if you qualify to do so.
Downsize Your Home
Is the house feeling empty now that your adult children have all moved out? If the real estate market in your area currently allows you to sell your house at a decent price, then that’s definitely an option for you to consider. You can then downsize and live in a smaller place while you’re still able to handle living on your own. Then in the future, you can use the money that you’re able to save from downsizing to help you pay for the expenses of assisted living.
Rent Out Your Home
Because of the housing crisis from years ago, it might not be possible for you to sell your house right now. In that case, you can either rent out your entire house or simply a portion of it. Renting out a room might sound like putting yourself into an awkward situation, but it can actually be nice if you’re able to find a tenant you’re able to get along with. Plus, the money you gain from the tenant can be used towards your future assisted living costs.
Also, another thing about renting out your home is that you can actually use it as a way to make passive income while living in an assisted living facility. Assuming that you’ve already paid off the house by that point, whatever the tenant pays will be your income. Obviously, you won’t want to be the one to have to deal with the tenant or property maintenance by the time you’re living in an assisted living home. However, if you’re able to get someone you trust to handle those things for you, then you can certainly live off of your income as a landlord.
Make Smart Financial Decisions
If you’ve always been smart with your money, then just continue doing what you’ve been doing. However, if you haven’t really paid much attention to what’s been happening to your money once you’ve earned it, then you need to carefully examine your financial choices up until now. Check to see if you have any outstanding debts that can actually be paid for in full with money you already have at your disposal; then pay it. Paying off the debt can instantly save you the money that would’ve otherwise gone to paying the interest rate on the loan.
After you’ve finished going through your outstanding debts, take a closer look at how the money you have is being spent. How much money are you spending every month? How much of it is for use on things that aren’t actual needs. If you see that you’ve been spending a huge amount on recreational things, consider cutting back on your spending for non-essential things from here on out. Every little bit that you manage to save now can eventually be used to help you pay for living in an assisted living facility in the future.
Financial and Legal Planning for Assisted Living Costs
There are also a variety of financial and legal planning strategies to mitigate the cost of assisted living or long-term care. For example, long-term care insurance, whether pure or a linked/hybrid long-term care insurance policies. A legal strategy would be to utilize a Lifetime Protection Trust to look to protect the assets from assisted living and long-term care costs.
For help with planning for how to plan for long-term care and to pay for assisted living, please contact us at any time.