How seniors can afford to age at home

Inflation may be declining and interest rate cuts appear imminent, but the financial pain felt by millions of Americans in recent years will take some time to heal. This is particularly true for certain demographics who may have had less of a financial buffer to lean on in recent years. For seniors, many of whom are heavily reliant upon savings, retirement funds and Social Security, it's particularly critical to budget in advance for potential costs.

For those who want (and plan) to age at home, then, the sooner you can start preparing for these costs, the better you'll position yourself financially. But how can you afford to age at home comfortably when your funds will be more limited than they were during your working years? That's what we'll break down below.

Start by exploring your long-term care insurance options online here.

How seniors can afford to age at home

The key to being able to afford to age at home is preparation. Seniors should investigate these two options now so that they're fully in place and available to use when needed in the future:

Long-term care insurance

Long-term care insurance doesn't just cover the costs of nursing homes and assisted living facilities. It's also a smart way to pay for in-home caretakers, including nurses and other needed medical professionals, all of whom can help you age at home more easily. Depending on the provider and the policy chosen, you may also be able to set up your plan to reimburse family members and friends who would otherwise be assisting you for free. 

According to the American Association for Long Term Care Insurance (AALTC), "home care services cover a wide range of needs, from homemaking and companionship to meal preparation and medication reminders."

This type of coverage can be extensive, according to the association, as it "may also include personal care services, or those that help with the activities of daily living, including home care services like bathing, dressing, and grooming. To promote a safe and functional lifestyle, a caregiver can help you brush your teeth, secure the buttons on your shirt, or stand-by while you bathe to make sure you do not fall."

While these services are a critical component of getting the care you need to help you age at home, long-term care insurance won't be free. And, if you wait to apply for a policy, the price will rise and the coverage terms you may be offered could become more limited. So don't wait for either to happen.

Get started with long-term care insurance here today.

Reverse mortgages

Reverse mortgages are a senior-specific financial product, only available for homeowners 62 and older. But if you're approaching that age or don't want to pay for the costs of a long-term care insurance policy, this could be a smart alternative that will also allow you to afford to age at home. 

Here's how it works: Instead of making payments to your mortgage lender, homeowners can instead get payments sent to them each month from their accumulated home equity. The lender can provide a lump sum payment or a line of credit, depending on your preferences and the lender in question. You can then use those funds for any financial needs you may have or are planning to have in the future (like medical and healthcare costs). The only downside is that your home will become that less valuable when it comes time to sell it or pass it on to beneficiaries, as the lender will deduct whatever you have borrowed from the home's value.

Still, that may be a manageable trade-off if the alternative requires you to move out and live in a nursing home or assisted living facility instead. Just be sure to carefully weigh the benefits and financial ramifications of this option before getting started.

Is a reverse mortgage best for you? Find out here now.

The bottom line

There are multiple paths toward aging at home while still maintaining good financial health. Seniors and those who are planning to care for seniors, however, should start researching options like long-term care insurance and reverse mortgages now, so that they're readily available when needed most. Neither is perfect and both will come with financial trade-offs, but with the right approach and thorough understanding of the pros and cons, many seniors may be able to leverage one or both of these products to allow them to comfortably age in the home they love.