As the deadline to file tax returns approaches, older adults who haven’t yet completed their returns may want help. With complex tax codes and rules that apply to retirees, filing independently is possible but can be overwhelming. Free tax preparation help for seniors is available to ensure they’re filing their taxes properly and on time, helping them avoid making costly errors and freeing up more money to help pay for senior care or living expenses. Below, we share free tax prep resources for seniors to file tax returns this year.
Free tax preparation services
Seniors can get help with their tax returns for free in many different ways. Although filing the return for your parent or older adult loved one may seem like a great idea, some tasks are best left to the professionals — especially if they need to deal with aspects of the tax code you’re unfamiliar with. These helpful programs offer free tax prep help for seniors (and some are available to people of any age).
Volunteer Income Tax Assistance (VITA)
VITA is a program that has been in operation for over 50 years, connecting volunteers from the IRS to people who need help with their tax returns. VITA’s services are free for people who make $60,000 or less, people with disabilities, and those who don’t speak English. To learn more about the VITA program, you can find a location near you, read about the services they offer, or call to speak with a representative at 1-800-906-9887.
Tax Counseling for the Elderly (TCE)
The TCE program is very similar to the VITA program, except it’s designed specifically for those 60 or older. TCE representatives are trained to answer retiree-specific questions about pension plans, RMDs, etc. You can learn more about the TCE program here or find a TCE site near you.
Other free tax prep services
In addition to VITA and TCE, other online programs such as MyFreeTaxes.com by the United Way and GetYourRefund.org can help you file your return. While they may sound like stand-alone entities, these services route you to free filing software or connect you with a certified tax preparer in the IRS’s VITA program. These online programs are a great option for those in areas without VITA representatives nearby or who can’t go far from their homes.
Common challenges seniors might face during tax season
There are quite a few common challenges seniors face during tax season that we’ve outlined below. Later, we explain how getting tax preparation assistance can solve some of these issues (and help you avoid their potential consequences).
Figuring out whether or not they’re required to file a return
While most seniors will be required to file a tax return, many believe they don’t have to. This can be a serious problem, as the IRS does not take skipping out on your taxes lightly. So, make sure that you’re positive you or your elderly loved one isn’t required to file a tax return before skipping out on tax season. Though this is a common tax error, you can easily avoid it when determining whether you need to file.
Calculating (and taking) their required minimum distribution
Certain accounts require you to take a minimum distribution (RMD) after reaching a certain age. While it may not seem like a big deal if you don’t take a distribution from your retirement account, it’s quite a big deal for the IRS. You actually have to pay the penalty if you don’t take your full RMD in a given year. There have been changes to some of the tax laws starting in 2023, so you may want to read up on RMD basics and essential RMD tax law changes to learn if you need to withdraw or talk to a tax professional about your situation.
Figuring out what deductions they can take
This is quite possibly the toughest challenge that seniors face, mostly because you’ll need to provide documentation of any expenses you will write off. Unfortunately, many people don’t realize they can deduct certain expenses until tax time. Not keeping records of expenses throughout the year makes it difficult to find documentation for the expenses they incurred months ago. To get a better handle on what you can write off this tax season, we’ve put together a couple of helpful articles on tax deductions for seniors and tax-deductible senior care expenses.
Benefits of getting tax prep help
Getting assistance on your tax returns can help you emotionally and financially. Below are some of the best reasons to get help filing your return this tax season.
Peace of mind
Let’s face it, filing your taxes can be very stressful. Having someone else do the heavy lifting will remove that stress entirely from your life. You will not have to worry about putting the return together, but you can rest easy knowing it was prepared properly.
Audit protection
In addition to peace of mind, you’ll also have some audit protection when someone else prepares your return. When working with a tax professional, they can come to your aid should the IRS have any questions about your return. At the end of the day, you’ll be much better off having a professional communicate and deal with the IRS for you.
Ensuring you haven’t overpaid
As we mentioned before, the tax code is complex, and it’s easy to forget about entering given information. Unfortunately, when it comes to income taxes, leaving off just one key piece of information can lead to underpaying or overpaying by a considerable amount. When a professional prepares your taxes, you won’t have to worry about mistakes on your return or underpaying/overpaying the IRS.
Making end-of-life decisions for yourself or a loved one is incredibly difficult. Included in these decisions is figuring out how to pay for the care you need as you reach the end of your life. Creating a plan for how you will pay for hospice or palliative care is an important step you can take in your estate planning and determining your final wishes so that when the time comes, you and your family are prepared.
If you or a loved one needs to have end-of-life care, there are many ways you can pay for the services. Here, we explain the different kinds of end-of-life care and options for paying for the services.
What is end-of-life care?
There are several forms of care for people nearing the end of their lives. People can receive end-of-life care either within a residential care community or in their own homes. End-of-life care services include hospice care and palliative care. A major distinction between hospice and palliative care is that hospice services do not aim to cure the condition or illness but rather manage pain and maximize comfort. Palliative care services also aim to maximize comfort, but they may be used in tandem with illness-curing treatments.
These services are coordinated before the individual’s death and after it occurs. Their requests are met, and they are kept as comfortable as possible as their wishes are respected. Some important questions for your loved one may include:
•Where they may want to pass away.
•Who they would like to be next to them.
•If any DNR (do not resuscitate) is in place.
•Any religious practices that should be honored.
•Any life-preserving measures that should be taken.
Determining whether life-preserving measures should be taken will help define if palliative or hospice care services will be used. This factor also helps determine some payment options — for example, Medicare has a hospice benefit, but it can be used only if the person receives hospice care.
How to pay for end-of-life care services
Many options exist on how to pay for end-of-life care. We outline some common methods of paying for end-of-life care below.
Medicare
If applicable, a terminally ill person with Medicare may be able to pay for end-of-life care services this way. The Medicare hospice benefit may cover the large majority of the hospice costs. Be sure to check that the facility or assistance you choose is Medicare-approved.
If eligible, Medicare may cover these expenses:
•Pain management medicine.
•Nursing, medical, and social care services.
•Additional assistance services.
•Medical supplies, e.g., catheters.
•Speech, physical, and occupational therapy.
•Short-term inpatient or hourly care.
•Grief counseling for the family.
•Respite care.
Remember that Medicare will not cover any treatment to cure the ailment. Additionally, room and board, ambulance services, and additional medical assistance are not covered unless organized by the facility or in-house assistance.
Private insurance
A person of any age is eligible to pay for end-of-life care by using private insurance. The first step is to contact your health insurance to assess what coverage you are eligible for.
Private insurance can be a great option to cover some expenses, but be aware that they do not cover the large majority. Discuss with your insurance agent what best coverage is available to get the most coverage for end-of-life services.
Life insurance
If you have a life insurance policy, you may be able to access funds from it to pay for end-of-life care. A viatical settlement is a type of life settlement that allows a policyholder to sell their life insurance policy to help pay for costs associated with a terminal or chronic illness.
You may also be able to use accelerated death benefits (ADBs) with your life insurance policy. This is different from a viatical settlement because the policyholder does not sell their policy to receive funds. Instead, an ADB is a rider, or add-on, to a policy that allows a policyholder to use money from their policy during their lifetime to help pay for costs, if they meet certain criteria.
Though most types of insurance policies offer ADBs, not all are eligible for viatical settlements. You should check with your insurance provider to learn if this is an option for you.
Long-term care insurance
Another type of insurance that can help pay for end-of-life care services is long-term care insurance. This is a type of insurance policy that can help cover costs of care that are not traditionally covered by normal health insurance. There are different kinds of long-term care insurance policies and also health requirements that a person needs to meet in order to be eligible to make a claim on their long-term care insurance policy.
In order to qualify for long-term care insurance coverage, applicants must also answer health-related questions. People with certain preexisting conditions may be denied coverage. So, if you are in need of end-of-life care, it’s more likely that you can use the coverage if you already have it.
Veterans benefits
VA benefits, like Aid and Attendance, can help pay for end-of-life care services. This benefit is available to qualifying wartime Veterans and their spouses. It provides additional income that can be used to cover medical and personal expenses, such as senior care or end-of-life care.
U.S. military Veterans can apply to the Veterans Administration to be enrolled in the VA Standard Medical Benefits Package. Eligible patients can get assistance in paying for hospice care that includes:
•No copay for care.
•Home, assisted living, or other location care.
•Medical devices and equipment.
•Personal care supplies.
•Medical care.
•Pain management medicine.
•Speech, occupational, and physical therapy.
•Grief and spiritual care.
•And more.
Medicaid
Medicaid is a program run jointly by the federal government and each state that provides health coverage to people with low incomes. It assists low-income families and seniors and offers the following cost coverage:
•Medical devices.
•Home health assistance.
•Speech, physical, and occupational therapy.
•Counseling services.
•Medical assistance.
•Pain management medicine.
•And more.
Proof that the patient is terminally ill may be required. You can also check to see if your loved one is eligible to receive dual coverage — where they can utilize both Medicaid and Medicare end-of-life care coverage.
Personal savings
If you cannot qualify for cost assistance for hospice services, you can use personal savings. Although not the most popular choice, paying out of pocket is another option.
Be sure to discuss with all cost-covering entities before taking this financial hit, as it can be quite expensive. Call your state’s Medicare and Medicaid agencies to see if they can help before choosing this route.
Bottom line
If you or a loved one is terminally ill and needs to cover the costs of end-of-life care, you have options. This is an inherently stressful time in your and your family’s lives, and many entities will assist with the costs of hospice care.
Utilize your options and discuss with the person needing these services what their requests and wishes are. Knowing what is affordable and the right path can make this treacherous time easier.
This guide explains how VA benefits like Aid and Attendance, Housebound Allowance, and VA Pension help pay for senior care.
The U.S. Department of Veterans Affairs (VA) offers benefits that give additional income to wartime Veterans and spouses with low income and long-term care needs. These benefits are Aid and Attendance, Housebound Allowance, and VA Pension. If you’ve heard of these benefits, you may know they’re complex and have questions about qualifying and applying for them. This guide explains how these benefits help you pay for senior care.
First, know that these benefits are related to each other. Some offer more income than others, and some can be combined while others cannot. Essentially, the VA Pension is the base-level benefit. The Housebound Allowance can be added to the VA Pension for a bit more income, or the Aid and Attendance can be added to the VA Pension for the highest monthly benefit.
In the sections below, we’ll explain the qualifications and details for each so you can learn about this set of benefits and how they can help you pay for long-term care.
How are the benefit amounts determined?
VA sets a maximum benefit amount for each benefit and may adjust these amounts annually when considering the cost-of-living adjustment (COLA) set by the Social Security Administration. Based on the review, the changes happen on December 1 every year for the following 12 months.
How can recipients use the money?
Recipients of the benefits receive the monthly payments directly in their bank accounts from VA. Money received from all the benefits is considered income so that recipients can use it for household or personal expenses. Because most recipients have health issues related to the qualifying health factors for these benefits, they often have extensive medical or long-term care services expenses to cover. The income from the benefits helps offset those costs.
Can spouses of Veterans qualify for these VA benefits?
The short answer is yes: If they qualify, spouses of Veterans can also receive the benefits. To qualify as a spouse, the Veteran must meet the military service criteria. The spouse’s household must meet the net worth criteria. The spouse must also meet the health criteria.
Another factor determining whether Veterans’ spouses qualify for these benefits is their marital status with the Veteran. A spouse must be currently married to the Veteran or must have been married to the Veteran at the time of the Veteran’s passing. With few rare exceptions, the spouse cannot be divorced from the Veteran or have remarried after the Veteran’s death.
Spouses can only apply for any of these benefits directly if the Veteran is deceased. If the Veteran is still living and the spouse is the only individual of the couple who requires care, the Veteran submits the application for the married benefit amount based on household medical expenses. We will cover what the married benefit amount is in a later section.
Can you combine VA Pension, Housebound Allowance, and Aid and Attendance?
You can combine some of these benefits but not all. There are three ways to get the benefits:
•VA Pension alone (if you don’t also qualify for Housebound or Aid and Attendance).
•VA Pension with Housebound Allowance (if you also qualify).
•VA Pension with Aid and Attendance (if you also qualify).
Notice how you cannot combine the Housebound Allowance with Aid and Attendance. That’s because the health-related qualifying factors are two different situations. Depending on the applicant’s needs, they qualify for one or the other. VA assesses the application and the applicant’s health and awards either the Housebound Allowance or Aid and Attendance if the applicant is eligible for one of the two. It may help to think about the VA Pension as the base-level benefit. VA will allow you to add the Housebound Allowance if you qualify or Aid and Attendance if you qualify, but you cannot add both simultaneously to the VA Pension.
Qualification criteria for VA Pension, Housebound Allowance, and Aid and Attendance
There are four areas of criteria that applicants must meet to qualify for any of these benefits:
The Veteran has qualifying military service.
The household does not exceed the maximum net worth.
The household does not exceed the income limit.
The person who needs care meets certain health-related criteria.
For all three benefits, the military service, net worth requirements, and income criteria are the same. This is to ensure that the Veteran served during a particular wartime period and also does not exceed a certain net worth. The health requirements differ among the benefits. We’ll explain the first three requirements now and the health criteria next.
Military service criteria
The Veteran must have served during an approved wartime period, such as World War II, the Korean conflict, the Vietnam War era, and the Gulf War. The Veteran’s service time must fall within specific dates for each wartime period. The length of qualifying service varies during some wartime periods.
A common misperception about qualifying military service is that the Veteran must have served in a combat zone, which is not the case.
Another aspect of the military service criteria is that the Veteran must not have had a dishonorable discharge.
Income and net worth criteria
While VA looks at income and assets as two different areas of qualification, they are intertwined due to overlapping complexities built into the code.
First, the VA looks at net income, including Social Security, pensions, IRA distributions, rental income, dividends, interest, and other types of income. Then, it subtracts anticipated medical expenses over the next 12 months, such as health insurance premiums and long-term care costs, including home care services, adult day care, assisted living, nursing home, or similar expenses. Any remaining annual income is then added to net worth. “Net worth” includes all available assets except a home on two acres or less. This includes savings, investments, IRAs, vacation homes, rental or investment property, and other assets. To qualify for any of these benefits, when added together, the annual income and net worth cannot exceed $155,356 in 2024.
Here’s an example of how the net worth and income rules work: A Veteran has Social Security and a pension of $3,000 per month. He also draws $500 per month from his IRA. Each month, he pays $2,500 of his $3,500 monthly income for home care services to help with his activities of daily living. VA would assume he has a net income of $1,000 per month or $12,000 per year. The Veteran has total savings, IRAs, and investments of $130,000. In the net worth calculation, VA would add the $130,000 in savings to the $12,000 in excess income to give him a total net worth of $142,000. This amount is below the limit of $155,356, so the Veteran would meet the net worth and income eligibility requirement criteria.
Health requirements for VA Pension, Housebound Allowance, and Aid and Attendance
We mentioned before that the health requirements are different for the three benefits: VA Pension criteria require the lowest level of care needs of the three, and Aid and Attendance requirements indicate the highest level of care needed. This is because VA aims to provide the most additional income to the Veterans with the greatest need for care, assuming that the greater one’s health needs, the greater their costs to pay for that care. And since any qualifying applicant does not exceed income and net worth limits, they have limited income to pay for that care.
Let’s take a look at the health criteria for each benefit:
VA Pension health criteria
To meet the health requirements for the VA Pension, you require the lowest level of care of the three benefits. The general requirements are that you are at least 65 years old or under 65 and have a long-term or permanent disability.
Housebound Allowance health criteria
To earn the Housebound Allowance, you must have a higher level of need than the requirements for the VA Pension. The general requirement for the Housebound Allowance is that you have a disability that keeps you in your home the majority of the time, but you don’t need help with any activities of daily living (ADLs). This means you can bathe, dress, eat, and ambulate (move around, walk) independently.
Aid and Attendance health criteria
The Aid and Attendance criteria require you to need the highest level of care out of the three sets of criteria. The general requirement is that at least one of the following applies to the applicant:
•You need help with at least two ADLs, such as bathing, dressing, eating, toileting, or ambulating.
•You have a cognitive disability that requires a protective environment for your safety.
•You have macular degeneration or are legally blind in both eyes.
Now that you know the level of care needs a VA Pension recipient has compared to that of an Aid and Attendance recipient, let’s see the maximum monthly benefit the recipients can get for each.
How much are the benefits for VA Pension, Housebound Allowance, and Aid and Attendance?
The maximum monthly benefit amounts differ for VA Pension, Housebound, and Aid and Attendance. Because the VA Pension has the lowest health need requirement, it pays the lowest of the three; Aid and Attendance’s health need requirements are the greatest, so it pays the most. The concept is that the higher level of care you require, the greater your medical and long-term care expenses. VA helps offset these expenses with these benefits based on the level of care needed.
The term “maximum” describes the monthly amounts for each benefit because the actual amount each recipient receives is based on their household net worth, the marital status of the person who needs care, and whether the person who needs care is the Veteran or the spouse. VA sets a maximum benefit amount, so you know that, as an Aid and Attendance applicant, you can receive up to a certain amount per month.
VA reviews the cost-of-living adjustment set forth by the Social Security Administration and may adjust the maximum benefit amounts that would be in effect for the following calendar year. For example, the maximum benefit amount for Aid and Attendance in 2024 is $2,727 per month.
The maximum amount for Housebound Allowance is lower than that of Aid and Attendance, and the maximum amount for VA Pension is the lowest of the three. The actual benefit amount a person receives for any of these benefits depends on the household’s income and net worth, whether the Veteran has a spouse, and whether the Veteran or spouse needs care.
What if I think my spouse or I qualify?
Qualifying and applying for any of the three benefits are complex processes. There are exceptions to certain rules and particular requirements for each criteria area. You may also need to submit supporting documentation with the application, and the application can be lengthy in itself. If you or your spouse needs care and could use extra cash to pay for it, don’t let the complexity of these benefits prevent you from applying — if you qualify, you may add over $2,000 to your monthly income.
If you think you meet the criteria for any of these benefits, professionals can help guide you through the process so you can submit a complete application the first time and start getting more funding to pay for your care.
Paying for long-term care can be a challenge. The VA Pension, Housebound Allowance, and Aid and Attendance benefits can help qualifying wartime Veterans and their spouses, widows, or widowers cover the costs of the long-term care they need.
If you’re approaching or have reached a certain milestone in your retirement journey, it’s crucial to be aware of the deadlines and requirements for withdrawing from your retirement accounts. These withdrawals are known as required minimum distributions (RMDs), and they’re not just a recommendation but a legal requirement once you reach a specific age. The deadline for the first of these withdrawals is a critical date in your financial calendar: April 1 of the year following the year you turn 73. This article dives into the specifics of RMD requirements, including changes that could affect your retirement planning, the significant consequences of missing the April deadline, and how you can use the funds so you withdraw money properly — which ultimately frees up more funding to help pay for the costs of long-term senior care services and other senior care-related costs you might encounter.
What is a required minimum distribution (RMD)?
If you’ve put money into retirement accounts over the years, your portfolio has grown by the time you reach your early 70s. Unfortunately, the federal government won’t let tax-advantaged retirement accounts grow indefinitely. Instead, they’ve mandated that people begin withdrawing funds after turning 73 and bring the account balance down to fund retirement or pay for senior care.
Though you might want to leave as much money in your accounts as possible to let them grow, you can also see the RMD as an opportunity to reap the fruits of your labor and diligent planning while enjoying your retirement as comfortably as possible.
In most cases, the deadline for taking your first RMD is April 1 of the year after you turn 73, which is a jump from the previous age of 72. The age increase means your money has another year to grow before you have to start withdrawing. After taking your first RMD, the deadline is December 31 of every year.
The amount of your RMD varies based on how much you have in your accounts and your current age. You can calculate your RMD using the IRS’s Uniform Lifetime Table or RMD worksheets. Even with worksheets and tables accessible on the IRS website, calculating your RMD isn’t easy. These tools from the IRS aren’t guaranteed and are a general means of checking your work or getting a broad idea of your RMD situation. Because determining an accurate, exact annual RMD is tricky, many seniors mistakenly miss the target and have to pay a hefty penalty. To calculate and take your RMD correctly, work with a trusted tax professional or financial advisor.
Keep in mind that the RMD is a minimum requirement — if you want or need more money from a retirement account, you can exceed the RMD as much as you’d like.
Which retirement accounts have RMD rules?
Most retirement accounts are affected by the RMD except for Roth accounts. If you have a retirement portfolio classified as any of these accounts, you’ll have to take an annual RMD:
Traditional (non-Roth) IRA.
SEP IRA.
SIMPLE IRA.
401(k) plan.
403(b) plan.
457(b) plan.
A profit-sharing plan.
Other defined contribution plan.
Roth IRA account holders do not have to withdraw an annual RMD; for tax year 2024, Roth 401(k) accounts are also exempt. If you don’t need the money to pay for long-term care or do but have other accounts that require an RMD, talk to your financial advisor about whether it’s wise in your situation to let your Roth account continue to grow. A note of caution: A beneficiary of a Roth IRA will have to take an RMD after the account holder’s death, so ensure your family or other beneficiaries prepare for the tax implications of withdrawing a required annual amount.
Consequences of missing the April withdrawal deadline
Retirement account holders must understand and adhere to required minimum distributions to avoid penalties. The IRS requires RMDs to be calculated separately for each IRA account, but withdrawals can be taken from any combination of accounts to meet the total yearly requirement. Other retirement accounts require that RMDs be taken separately. The account owner is responsible for ensuring the correct RMD amount is withdrawn, even if they get help from IRA trustees or plan administrators.
If the full RMD amount isn’t withdrawn by the deadline, there is a high tax of 25% on the amount that wasn’t taken out for 2023 and later years. This amount has been lowered from the 50% tax charged prior to 2023. If the retiree corrects the missed amount within two years, the tax can be further reduced to 10%, but they must file Form 5329 with the federal tax return for the year the RMD was required but not fully taken.
Because calculating RMDs can be complicated and the penalties for not following the rules are severe, it’s a good idea to use IRS worksheets and talk to financial advisors or tax professionals. This can help retirees make sure they are following RMD rules and avoid financial stress. It’s important to plan carefully for retirement and follow IRS guidelines to have a financially secure retirement.
Significant RMD changes for tax year 2024
The SECURE 2.0 Act has introduced a significant change for Roth 401(k) account holders starting in 2024. As a result of this legislation, Roth 401(k) accounts will no longer be subject to required minimum distributions. This change aligns the treatment of Roth 401(k)s with Roth IRAs, which have always been exempt from RMD requirements.
It’s important to note that this new rule takes effect in 2024, meaning that Roth 401(k) account holders must still take RMDs for the 2023 tax year. However, beginning in 2024, retirees with Roth 401(k)s will no longer need to worry about calculating and withdrawing RMDs from these accounts.
Before this change, retirees with a Roth 401(k) would often need to roll the account over into a Roth IRA to avoid taking RMDs. The SECURE 2.0 Act eliminates this additional step, simplifying the retirement planning process for those with Roth 401(k)s. This update provides greater flexibility for retirees with Roth 401(k)s, allowing them to keep their savings in these accounts longer without the obligation to take annual distributions.
How can I use the money from my RMD?
RMDs are entirely discretionary, meaning how you use your retirement account withdrawal is totally up to you. If you enjoy an active retirement, you can use the cash from your RMD and subsequent withdrawals to pay for the next vacation or family visit. If you need to pay for senior care or long-term care, the RMD can also help cover any living expenses, including assisted living fees, home care payments, and any medical device not covered by insurance that makes your life more pleasant.
Ultimately, the RMD doesn’t have to be a source of stress in retirement. Although the rules are complex and the calculations even more so, plenty of resources are available to clarify the details and lay out precisely what your RMD will be and when you must begin taking it. Taking your RMDs provides more cash flow to fund a blissful retirement or boost your quality of life by paying for senior care services.
Discussing your parent’s finances, future, and senior care needs can be sensitive topics. If you’ve noticed that your parent might need long-term care and need to figure out how to pay for it, you’re not alone: By 2030, one in five Americans will be at retirement age. Addressing the financial aspects of senior care sooner than later allows you to plan for the future and avoid making quick decisions in a crisis. Here, we outline topics to cover when talking with your parent about their financial situation and tips on how to start a productive financial conversation with them.
Financial details to discuss
Seniors’ financial situations can greatly influence how they receive their future care. You need this information to know your options for long-term care, living arrangements, and how they will pay for it.
Income and available financial resources
People may develop several financial sources as they age. You can bring a checklist of these possible financial tools for discussion. You can go through the list, and if they have any of these types of income sources, determine the dollar amount in each:
Now that you’ve talked about income, you want to list the non-liquid assets your parent has and their estimated resale value. If necessary and your parent is willing to part with these assets, selling them could free up money they can use to pay for a senior living community or other long-term care expenses. Their home, car (if they plan to stop driving soon), rental properties or other real estate assets, and others can be funding sources for care.
Considering your parent’s debt is also important. You want to keep this in mind because it affects how much funding they have to pay for senior care. You need to know if they have a mortgage on their home, credit card debt, or owe money in other ways so it’s not a surprise later on.
Another source of income they can use to pay for senior care is Veterans’ benefits if they apply to your parent. Benefits available to qualifying older adult Veterans and their spouses can help pay for senior care. Benefits like Aid and Attendance can provide up to $2,642 of monthly income to qualifying Veterans and their spouses. If you don’t know whether your parent is a Veteran, ask them. Veterans’ benefits can be tricky to understand and apply for, so if your parent is a Veteran, talk with a professional who can help you understand the process.
Medicaid can be another way to pay for senior care. This needs-based health care program is federally funded and jointly run by each state. Asset and income limits exist to qualify, but those who do can get help paying for senior care. It’s important to get a clear picture of your parent’s finances so you can explore this option if you need to.
Your parent’s budget
When you gather this financial information, it is also wise to discuss their monthly budget. Knowing how much money they spend on a monthly and annual basis is equally important as the sources and amounts of income. Like debt, this affects the bottom line of how much they can spend on senior care.
Working with your parent to determine their budget (if they don’t already have one) is also helpful in other ways. For instance, money management is a skill that sometimes declines when older adults need more help and long-term care. Defining their budget can be an exercise that sheds light on their abilities — or waning abilities — to manage their finances independently.
Determining your parent’s budget will also inform your family of a monthly dollar amount they may be able to spend on home care services if that is a senior care option they need and want to have. Many older adults prefer to age in place, so if your parent is one of them, you’ll need this budget to learn if they can afford long-term care services while continuing to live at home.
How to approach the conversations
Though these important topics can be uncomfortable to discuss at first, the bottom line is that you care about your parent’s well-being. Remember that these conversations will help set up your family to meet the challenges that come with finding the right senior care and also funding it.
Patience and compassion
You’ve been thinking about having these conversations for a while, but that doesn’t necessarily mean they have been on your parent’s mind. Even if you approach the first conversation perfectly, your parent may feel caught off guard. They may feel defensive or nervous to admit they are aging and their level of independence is changing. Feelings like these are natural, so having patience and empathy are key.
Remind them that you care
If the conversation isn’t going as planned, ensure your parent that you love them and have their best interests at heart. Be mindful of their emotions and mental state — especially if they struggle with focusing or memory issues.
Come prepared with a list, pen, and paper
You can also bring a written checklist list of topics for discussion, like the financial list mentioned earlier. Have a notepad and pen or computer handy to write down all the information they tell you.
Taking notes will also help you avoid rehashing discussions as often, and you can refer back to the notes at later dates. You’ll also see what information they don’t have handy and can more easily turn the conversation into a list of action items that will lead to progress.
The bottom line
You want your parents to have the life and care they want. Having a financial discussion is essential to facilitate these two aspects of life. Planning for getting senior care can set up your family to enjoy one another and for your parent to live out their retirement years with fulfillment and safety.
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