Financial Planning for Senior Living

Financial Planning for Senior Living

Whether you’re saving for yourself or your loved one, it’s essential to prioritize financial planning. Here are some tips to help make the process easier.

Private funds can come from various sources, including savings accounts, retirement plans, and inherited money. Long-term care insurance (LTCI) can also be helpful to cover future senior living costs.

Private Funds

If you’re considering moving to a senior living community like Westminster Towers, understand the costs. Knowing that many assets and options can help you afford senior care is also essential.

For example, move into a Continuing Care Retirement Community (CCRC) that offers varying levels of health care services in exchange for an entry fee and monthly service fees. You can deduct part of the entrance and monthly service fees from your taxes because they qualify as prepaid medical expenses.

Another resource that can be used to pay for senior living is long-term care insurance, which can help ease the financial burden of future senior care needs. Talk to a financial advisor for more information.

Long-Term Care Insurance

Long-term care costs can deplete your retirement savings, and you might need to rely on family members for support. This option is not viable for everyone, so purchasing a long-term care policy is integral to a comprehensive financial plan.

When you shop for a policy, look for one with a shorter elimination period and simple or compound inflation protection. You also should consider the premium payment method, as some policies require a single lump sum payment while others offer periodic payments.

Calculate average annual nursing home costs and subtract your fixed income sources (e.g., Social Security, pensions) when comparing cost and benefit options. You consider a lower-cost policy if you have a surplus.

Social Security

Many seniors have the goal of aging in place in their own homes or apartments. However, physical and mental health issues can make this difficult. When these issues occur, seniors may need to move to senior living.

Assisted living provides a combination of housing and personal care services. Typically, the housing is designed for aging adults and may have features that ease mobility or reduce the need for stairs. The community can also offer a variety of amenities, activities, and services that help keep residents healthy and engaged.

Social Security offers retirement and disability benefits to eligible workers. Learn about eligibility requirements, how to apply for benefits, and more. Also, find out how to change your name or replace your Social Security card. SSA’s Social Security online service helps you manage your account.


Most seniors want to stay in their homes and apartments into their golden years, but health or financial status changes could make this problematic. Seniors may need help with activities of daily living (ADLs), where assisted living comes in.

Independent living communities are often designed for older adults, and residents pay a monthly fee for rent and amenities. This fee can be paid using personal funds, retirement or Social Security income, home sale proceeds, long-term care insurance, and VA Aid and Attendance benefits. Some communities also offer respite care for family caregivers. There are also low-income or subsidized senior housing options, such as HUD’s Section 504 Home Repair Program and Section 202 Supportive Housing for the Elderly.

Pooled Trust

A non-profit association manages a pooled trust and provides beneficiaries with an account or “sub-account.” Although each beneficiary’s sub-account is unique, the assets within each sub-account are combined for cost-effectiveness and investment optimization.

Setting up this type of special needs trust (SNT) well before needing care is essential. This is because it is often subject to a Medicaid “look-back” period and is best done before entering a nursing home or needing long-term care insurance.

Beneficiaries choose pooled trusts for a few reasons. One of the most common is access to professional trustees. They often have lower fees than financial institutions and may be able to provide more diversification in investments. They also keep up with changes in benefit rules and local services.