How to Finance Nursing Home Care

With the American population living longer than ever before, it is imperative that we all plan to finance nursing home care at some point either for ourselves or for our loved ones. Even in the event that we do not have to do it, we still need the financial security to know that we can do so if we must. Follow these steps to help you determine the best way to finance nursing home care.

Instructions

Difficulty: Challenging

1. Consider your options first. When we or our loved ones reach an age where living without assistance is no longer possible, there are several choices: home health care, assisted living facilities or nursing homes. Each of these options provides help and depend on the needs of the individual candidate and each varies according to cost.
2. Develop a financial plan before the need arises. The best choice is to invest in long-term care insurance while you are employed. This way, a small amount is deducted from your paycheck each month over the years and you are able to have a financial nest-egg to help you when the need arises.
3. Know that the government will only assist you to a certain extent. Medicaid is a reliable option for all Americans and it does cover the cost of long-term care, but the amount they provide is limited. There are always important extras that will make life more comfortable, and you will want to be able to afford them, so putting money aside for this purpose is important.
4. Purchase individual retirement accounts (IRAs) and certificates of deposit (CDs) to help you save money in a way that limits tax liability. If you take your retirement funds and put them into CDs and IRAs, you can keep the bulk of your funds without Uncle Sam taking such a large chunk of the money. This money can then be placed in the hands of a trustworthy family member or attorney who can help distribute the funds for your long-term care.
5. Protect your home by deeding it to one of your children or a trusted family member. This way, the home passes directly to the loved one in the event of death and the money cannot be used to finance the existing debts of someone who was receiving costly long-term care prior to passing away.
6. Hire an attorney who specializes in elder law. This way, the attorney can help you prepare for the rather complex area of financial planning for long-term care.