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Financial

For many people, the overriding concern with moving into a retirement community are the finances. How much can I afford? Are there any kinds of benefits available? What about long-term care insurance?

This portion of the website is devoted to providing information about these issues. In addition to the information provided, we suggest you talk to a financial advisor, insurance agent or Veteran's Administration office to get additional details.

Financial information for Heritage Senior Living

Cost Comparison Worksheet

How much do you currently spend to live in your home? How does that compare to the cost of a retirement community? Most people are aware of what they spend for a mortgage or utilities but fail to take into account all the other expenses they incur, living at home.

To help you compare your costs, we've provided a handy worksheet. Download this form and take it with you when you visit a retirement community.

Long Term Care Insurance

Won't my health insurance or Medicare pay for long term care?
Unfortunately, no. Ordinarily health insurance policies and Medicare usually do not pay for long-term care expenses. Medicaid, a federal/state health insurance program, will only pay for long-term care if you've already spent most of your savings or other assets.

What will long-term care insurance cover?
Long-term care insurance typically covers the cost of:

  • Help in your home with daily activities like bathing, dressing, eating and cleaning.
  • Community programs such as adult day care.
  • Assisted living services that are provided in a special residential setting other than your own home. These services may include meals, health monitoring, and help with daily activities.
  • Visiting nurses.
  • Care in a nursing home.

When should I buy a policy?
The best time to buy a policy is in middle age while you're still healthy. Many people don't think about long-term care until they get in their 70s or 80s and their health begins to fail. At these ages, you may be too high a risk factor for an insurer to cover you, or if you do qualify the premiums may be astronomical.

Is long-term care insurance right for me?
It depends upon your situation. Long-term care insurance is expensive. An individual who's 65 years old and in good health can expect to pay between $2,000 and $3,000 a year for a policy that covers nursing home care and home care with premiums adjusted for inflation. You will need to carefully consider your current assets and income. Discuss this with your financial advisor.

What should I look for in a policy?

  • Coverage. Some policies pay only for nursing home care or home care. Some provide a mixture of care options that include nursing homes, assisted living facilities and adult day care. Some will pay for a family member or friend to care for you in your home.
  • Daily or Monthly Benefit. This is the amount of money the insurance company will pay for each day or month you are covered by the policy. If the cost of care is exceeds your daily or monthly benefit, you will need to pay the difference out of your own pocket.
  • Benefit Period. This is the length of time you will receive benefits from your policy. You can choose a benefit period that spans two to six years or for the rest of your life.
  • Elimination or Waiting Period. There is a waiting period anywhere from 0 to 100 days. During this time, you must pay for all of your long-term care expenses out of your own pocket.
  • Inflation Protection. Make sure your policy includes inflation protection. There are two kinds: the right to add coverage at a later date and automatic coverage increases.

What features are important?
Make sure your long-term policy:

  • Clearly explains when you will be eligible for coverage and how your eligibility will be determined.
  • Does not require that you spend time in a hospital before receiving benefits.
  • Will be renewed as long as you pay the premiums.
  • Lets you stop paying premiums once you begin receiving benefits.
  • Has one deductible for the life of the policy.
  • Automatically covers pre-existing conditions if you disclosed them when you applied.
  • Offers choices for inflation protection including an automatic increase in your benefit on an annual basis or a guaranteed right to increase your benefit.
  • Allows you to downgrade your coverage if you cannot afford the premiums.
  • Includes coverage for dementia.
  • Provides at least one year of nursing care and home health coverage.
  • Allows the right to cancel the policy for any reason with 30 days of purchase and receive a refund.

Veteran's Aid and Attendance Special Pension

The Veterans' Administration offers a Special Pension with Aid and Attendance (A&A) benefit that is largely unknown. This Special Pension (part of the VA Improved Pension program) allows for Veterans and surviving spouses who require the regular attendance of another person to assist with bathing, dressing, meal preparation, medication monitoring or other various activities of daily living. This benefit is available to individuals who reside in assisted living communities, residential care homes, skilled nursing facilities and those receiving personal in-home care.

This is a "pension benefit" and is not dependent upon service-related injuries for compensation. Most Veterans who are in need of assistance qualify for this pension. Any War Veteran with 90 days of active duty with at least one day during active War time is eligible for this benefit. A surviving spouse of a War Veteran may be eligible if married at the time of death. The individual must qualify both medically and financially. Assets cannot exceed $80,000, however many things including their home, vehicle, annuities, pre-paid funeral expenses and many other items are not included in this number. A Veteran is eligible for up to $1,554 per month, while a surviving spouse is eligible for up to $998 per month. A couple is eligible for up to $1,842 per month. For further information regarding financial qualifications, consider seeking the professional advice of an attorney or financial planner.

There are two ways to apply for the Aid and Attendance benefit. There are some senior communities that will assist you in applying or refer you to a professional who will complete the documentation for you. You may also apply by contacting your Regional Veteran's Administration Office. To locate the closest regional office to you, visit the VA web site.

Once you apply, the average processing time is about 3-6 months depending upon the accuracy of the initial application. However, the VA does pay retroactively from the date of application. The resident is paid directly from the VA. This program financially assists the resident with paying their monthly rent, care and/or services.

The Aid and Attendance Benefit is considered to be the third tier of a VA program called Improved Pension. The other two tiers are Basic and Housebound. Each tier has its own level of benefits and qualifications. While the objective of this site is to disseminate information about the Aid and Attendance Benefit, we urge you to read an important document prepared by the American Veterans Institute that clearly explains the Improved Pension program, its levels of benefits and the qualifications for each. If you or your loved one does not qualify for Aid and Attendance, you may want to check to see if you qualify for another level of the Pension.

For more information about this benefit, please contact your local Veteran's Administration office.

Tax Deductibility for Assisted Living

You, or the person paying for your care, may be eligible for certain deductions on your federal tax return, depending on the type of services and the level of care you require.

The IRS allows deductions for the cost of housing and meals if you are receiving long-term care in a home or community for the aged due to chronic illness or the inability to live alone. Assisted living residents receiving personal care services may qualify for the deduction.

To qualify, you must require assistance with at least two activities of daily living (such as eating, toileting, transferring, bathing and dressing), and a physician must certify that you have been unable to perform these functions without assistance for at least 90 days.

The same deduction can be used for people who require substantial supervision to maintain their health and safety because of cognitive impairment such as Alzheimer's disease.

An adult child paying for their parents' care may also qualify for the tax deduction, if the parent is a dependent.

For a parent to qualify as a dependent, he or she must:

  • Be related to the child or have lived with the child for the entire year as a member of the household;
  • Be a U.S. citizen or resident, or a resident of Canada or Mexico, for some part of the calendar year in which the tax year began; and the child must have provided over half of the total support for the parent for the calendar year.

Tax deductions can be a useful way to alleviate the cost of care. However, please note that Heritage Senior Living does not provide tax advice for its residents, potential residents, or families, and this information should not be considered as such.

For more information about possible deductions, please consult with a tax adviser.