Your aging parent needs to move somewhere they can get senior care. Not around-the-clock care, just a few hours a day. Maybe get some help managing their medications daily. Have their meals prepared for them. Have someone else do their laundry. Perhaps get a bit of assistance with their personal care each morning.
The trouble is, you’re not sure they can afford it.
You may assume that living in a senior living community is a lot more expensive than staying in their current home. But the cost difference might not be as much as you think.
Comparing costs of senior living with staying put
Consider your parent’s current living expenses. Even if they’re living mortgage-free, they still have expenses like property tax, home repairs, housekeeping, utilities, as well as groceries and eating out. Perhaps they’re receiving care in their home, but because the amount of government-funded home care is limited, they’re having to pay extra to “top up” the hours of care.
Now consider the monthly cost of living in a senior living community. Most of your parent’s current expenses are included. When your parent moves in, they no longer have to worry about paying property tax. Nor do they have to pay for someone to take care of their yard or clean their windows or clear their eavestroughs. They don’t have to worry about repairing or replacing a furnace or air conditioner that unexpectedly breaks down. Those types of expenses are the responsibility of the senior living community.
And if the community is preparing their meals for them, they no longer have to pay for groceries.
And instead of paying for “top-up” home care out of pocket, your parent may receive personal care services as part of the senior living community’s monthly fee.
Depending on your parent’s situation, once you factor all this in, the added expense of senior living may be quite manageable.
Possible sources of money
Here are some of the assets and income streams that might help cover your parent’s monthly living expenses while they’re living in a senior living community:
Company pensions
Possibly from several sources if your parent worked for more than one employer in their careers. May include foreign pensions if they worked outside Canada at some point.
Government benefits
Including Canada Pension Plan and Old Age Security payments. May include a spousal allowance, disability tax credit, or veteran’s benefits.
Personal savings and investments
Including RRSPs / RRIFs and Tax-Free Savings Accounts. May include income from a rental property or sale of assets.
Home equity
If your parent currently owns their own home, proceeds from its sale can help to cover future living expenses. Consult a financial professional to understand tax implications.
Insurance
May include long-term care insurance. Check the insurance policy to see what expenses are eligible. Your parent may also be able to draw on assets in a life insurance policy. Again, seek professional advice on how this might be done.
Loans
Including a reverse mortgage. However, to qualify for a reverse mortgage, one of your parents or a co-borrower would need to continue living in the house. Other loan conditions may apply.
Family
Members of your family may choose to help your parent cover part of their living expenses. But they should consider whether this is something they can sustain over the long-term.
Summing up, a senior living community may be more affordable than you might initially think, especially when you take into account all of your parent’s current living expenses and get a complete picture of their assets and income streams.
Want more ideas on how to pay for senior living? Contact one of our communities near you.
