More than 75% of adults over 50 years of age say they prefer to age in place… and research shows that at least half of older adults will need care in their older years, whether in their own homes or in a care facility.
Often a first step for empty nesters is moving from the large family home to a townhouse or condo where building maintenance and snow/lawncare are taken care of for you. More and more, one-level living or at least one bedroom and bathroom on the main floor is a priority for aging in place. Regardless of where you live, staying active and connected to community and family is key to successful aging.
I am currently working with a couple who has a unit waiting for them in a local retirement community. They will be moving in mid-January and they already have everything arranged on a timeline to list their home for sale the end of January.
Another couple I am working with started the process many years ago… first downsizing from a house to a townhouse… then to a condo… and now they are moving out of the state, close to their daughter… to rent in an independent living senior complex with a continuum of care for assisted living, nursing and dementia care when and if they need it.
Is it time for you to sell your home and move into long-term senior care but you wonder how how to plan and pay for it? This is a time to consult with your financial planner, tax accountant, attorney for professional guidance.
There are different ways to plan and pay for long-term care, including…
- Immediate annuities – convert a lump sum into a guaranteed income stream
- Bridge loans – short-term financing to cover long-term care costs until other expected funds become available, most often secured using the value of your home
- Government programs – programs such as Medicaid and veterans benefits offer financial assistance for long-term care but have specific requirements
- Long-term care insurance – plan ahead for help covering care costs, but don’t expect the insurance to cover it all
- Personal savings and investments – often a primary source of funds for long-term care, consult a financial planner to understand how best to use these funds
- Selling your home – can be a primary source of funds for long-term care, be sure to consider financial implications
- Reverse mortgage – can help fund additional costs and health care needed to stay in your home
If you sell your home, consider potential financial implications…
- Medicaid eligibility – selling a home can impact Medicaid eligibility because of strict asset limits of the program; consult an elder law attorney to understand how you might be affected
- Taxes – selling your home may incur capital gains tax; there is currently an exclusion for your primary residence ($250,000 for a single, $500,000 for a couple if you lived in your home 2 of the last 5 years before selling); consult a tax professional to understand how you may be affected
- Veterans benefits – selling a veteran’s home may affect VA benefits, they must have a net worth lower that $150,538; consult a Veterans Service Officer or specialized attorney to understand the implications for you
- Estate planning and inheritance – consult an estate planning attorney to review and update legal documents before selling
Sharlene Hensrud, RE/MAX Results – shensrud@homesmsp.com
