Have you considered selling home and getting an annuity to pay for Assisted Living ?

OregonGuy

OregonGuy

Senior Member
Here In Porland Oregon the current ALF rate is about $3,000 per month.

In return the ALF provides …

3 meals per day, registered Nurse 24/7, Laundry and housekeeping, medication management (you buy the meds and they deliver prescribed dosages during the day), transportation to/from medical/dentist/vision and group outings.

In addition, depending on the facility the have social activities such as movies, exercises, piano sing alongs, bingo. Etc.

Assuming you can net $300 K from the sale of your home and buy a fixed 10 year annuity yielding 6 % interest you will be guaranteed $3,306.72 per month for ten years (my source is a retirement calculator from Prudential…if this is incorrect please say so!).

​

10-year annuity with an investment of $300,000 if the interest rate is 6%​

You can withdraw $3,306.72 monthly.

Total of 120 payments:$396,806.49
Total interest/return:$96,806.49
Of course there will be nothing left after 10 years. In my case I do not care after that ..

In the words of Doris Day “Que Sera, Sera” whatever will be, will be” or in the words of Rhett Butler “Frankly my Dear I do not give a damn!
 

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The Bankrate calculator I used showed the total interest would actually be $100,400.90 over the 10 years at 6%, but that is only the investment return without consideration for annuity commissions and management fees, and the fact that all or a portion of the withdrawals are taxed as ordinary income.

The OP assumes the ALF monthly rate (low for my area) would remain unchanged over the next 10 years. Clothing and other personal needs, health insurance premiums, prescriptions, and such were not included in the calculations. If there was no suitable public transportation and the resident had no car or income to maintain it, they would be confined to the facility every day for the next 10 years, unless their family was willing to provide transportation from time to time.

I would just as soon keep my house. If the day comes I need help living here, there are services I can hire for assistance in the home 2-3 times a week or so. When or if that isn't enough help, I would go to a facility and pay my own way. If I didn't have the funds, the balance that my Social Security benefit didn't cover would be paid by Medicaid.
 
MACKTEXAS said:
The Bankrate calculator I used showed the total interest would actually be $100,400.90 over the 10 years at 6%, but that is only the investment return without consideration for annuity commissions and management fees, and the fact that all or a portion of the withdrawals are taxed as ordinary income.

The OP assumes the ALF monthly rate (low for my area) would remain unchanged over the next 10 years. Clothing and other personal needs, health insurance premiums, prescriptions, and such were not included in the calculations. If there was no suitable public transportation and the resident had no car or income to maintain it, they would be confined to the facility every day for the next 10 years, unless their family was willing to provide transportation from time to time.

I would just as soon keep my house. If the day comes I need help living here, there are services I can hire for assistance in the home 2-3 times a week or so. When or if that isn't enough help, I would go to a facility and pay my own way. If I didn't have the funds, the balance that my Social Security benefit didn't cover would be paid by Medicaid.
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All very important considerations. Thank you~!
 
OregonGuy said:
You can withdraw $3,306.72 monthly.
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I don't know anything about annuities, but my daughter worked at an assisted living facility while she was in college, and I remember her talking about residents who needed more than the amount of care provided by assisted living were required to leave to go to a nursing type of care facility.

I'd guess a nursing facility would cost three times what the assisted living places cost, and even though statistically you wouldn't be there long (median stay is 5 months til death), would the annuity let you take out three times as much per month (I.e., is it possible with just a penalty payment, or is it not possible at all?)?
 
HoneyNut said:
I don't know anything about annuities, but my daughter worked at an assisted living facility while she was in college, and I remember her talking about residents who needed more than the amount of care provided by assisted living were required to leave to go to a nursing type of care facility.

I'd guess a nursing facility would cost three times what the assisted living places cost, and even though statistically you wouldn't be there long (median stay is 5 months til death), would the annuity let you take out three times as much per month (I.e., is it possible with just a penalty payment, or is it not possible at all?)?
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usually it is what it is unless you want to buy all kinds of expensive riders
 
thank you all
I lived in an ALF in Las Vegas and really enjoy the social interaction it afforded. Of course being only one of the ten men among the 80 women there was great! I have 3 "sorry to see you leaving" cards signed by many of them. So I was sorry to have to leave in order to live with, and provide my entire PERS and SS (totaling $4K per month) to help feed and support family here in Oregon.

The owner of the home I am in has a "reverse mortage" which will force the home to be sold when the owner passes ... so I will not have the choice of staying in the home. The annuity discussion I posted here is assuming I will inherit $300k from the sale of the residence I am living in if the owner dies before me. Even if I had the option of living in a home alone or entering an ALF is a no-brainer for me ... I crave the social interaction afforded by an ALF I hear most of you saying an annuity is not he best way of obtaining my objective of living in an ALF for ten years ... so what's a better way?

Regarding the discussion of ALF versus a Nursing Facility (NF)...

ALF is for folks who do not need a registered nurse (RN) all the time. The ALF I stayed in had a base cost of $3K per month for transportation+room+laundry+board (3 meals per day)with "a la cart" charges for optional med management, assisted dressing, assisted bathing. Fortunately I only needed the base package. An RN is at the facility but basically only for emergencies.

NF is for people who need full time nursing attention. (I may be wrong on this!) So, of course an Nf costs a lot more.
 
It doesn't sound like a bad deal, as long as you are fine with living in a downsized situation, but it sounds like you have adapted to that. Hopefully you will have some other income to help with unexpected expenses and extras. However, in the event you are a veteran, then that whole picture changes, as there are homes for veterans that offer many benefits, and it generally costs about half of your income, and everything else is provided.

I think the important thing here is what you want for the rest of your life, and that can vary a great deal with each individual. If this sounds like it would meet your needs and provide happiness, then perhaps you could make an appointment with one of their financial counselors and get very detailed and specific information to see if it's a sound plan. No commitment is necessary to get the info.
 
You may want to sit down and do a honest budget. Who knows when and if the 300k materialize.
Start doing homework. VA homes - the folks at VFW, VA hospitals are full of information.
ALFs - MIL has been in full nursing need for almost two years. Her 13k a month will turn into a Medicaid slot.
 

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