As per the Alzheimer’s Association, about 10% of Americans over the age of 65 have dementia or Alzheimer’s disease. Dementia patients and their families often encounter several challenges, one of which is the cost of dementia care. Thankfully, funding for it does not have to be a financial burden on you or prevent your parents from obtaining high-quality support. Tap on our list of options to pay for memory care.
This option permits adult children of folks with Alzheimer’s or dementia to declare their parents as a dependant on their tax return, allowing them to save potentially thousands of dollars. Eligible families may also be entitled to the Child and Dependent Care Credit.
Many life insurance plans for retirees can be used to pay for Alzheimer’s care. Selected ones can be sold for a fixed amount and paid out in monthly installments. At a home for the elderly, certain life insurance plans can even be converted into months or years.
A combination policy that incorporates life insurance and long-term care is becoming increasingly common. Phone your insurance provider for particular specifics if you or your loved one has a life insurance policy and need to use it to fund memory care. Many have distinct features that can make memory care more affordable.
Perhaps your parents with dementia have not reached pensionable age. Not to worry as benefits from pension schemes such as annuities and individual retirement accounts (IRAs) can offer essential monetary backing.
Individuals with dementia may be eligible to take funds from an IRA or an employer-sponsored retirement plan before reaching the age of 59.5 without incurring the usual 10% early withdrawal charge. However, do note that this money will most likely be deemed as normal income, and taxes on the amount taken will be due.
Personal assets, such as investments and private possessions owned by the dementia patient or other family members, can be used to cover care costs.
A reverse mortgage allows homeowners to transform their home equity into money. This arrangement allows a homeowner over the age of 62 to turn some of the equity in his or her house into cash while still retaining ownership. The amount a person is entitled to borrow is usually determined by their age, the value of their property, and the rate of interest offered by the lender.
Medicare or Medicaid
Medicare is a government program that helps qualified seniors and others pay for medical expenses. In principle, if a person is eligible for Social Security, they will also be eligible for Medicare. Unfortunately, it usually does not cover memory care but only short-term care in a nursing facility.
Medicaid is a healthcare program for low-income Americans. For the elderly who fulfill Medicaid’s state standards, it covers some components of short- and long-term care. State rules apply, thus it’s advisable to examine your state’s regulations in detail. Keep in mind also that Medicaid is not accepted by all memory care centers.
It can be hard to come to terms when parents require long-term care, especially if the need arises unexpectedly. Use this list of financial possibilities to acquire some short-term cash while you figure out your overall financial situation.