How to finance long term stay in Assisted Living Fac other than using an annuity.

OregonGuy

OregonGuy

Senior Member
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?
 
I suppose a lot of it depends on your ability to manage your own affairs and or how much of a trusted support network you have to assist you in managing your finances in the future.

I would prefer to keep control of my money as opposed to buying an annuity.

I would assume that most of my current expenses would be covered by the monthly cost of the adult home and that the investments would be used as a supplement to my current income from Social Security, pensions, etc…

I would divide the $300k between a ladder of CDs that would hopefully cover the first five years of supplemental payments and a conservative balanced mutual fund like Windsor or Wellington that would hopefully provide an opportunity for some modest growth.

As the years roll by you should be able to gradually sell the mutual fund and replenish the CDs.

Until you actually have this $300k in hand I would look at options that are possible with current income and investments.

I wouldn’t stress over it, just put one foot in front of the other and things will work out.
 
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Both your posts about this have confused me. :unsure: At first it seemed like you owned the home. When I read your subsequent post, I realized you do not. Why do you feel you might inherit that money? Is the owner of the home you're staying in a close relative? What would you do if you do not inherit $300,000 or if the projected inheritance is split among other relatives?

As far as purchasing an annuity, I'd be very hesitant to go that route. One must make sure it's through a rock solid financial institution and do due diligence so that all of the small print terms are understood. As was previously posted, same with understanding exactly what the ALF terms are. And in that respect, what about if they start raising their rents?
 
Aunt Bea said:
I suppose a lot of it depends on your ability to manage your own affairs and or how much of a trusted support network you have to assist you in managing your finances in the future.

I would prefer to keep control of my money as opposed to buying an annuity.

I would assume that most of my current expenses would be covered by the monthly cost of the adult home and that the investments would be used as a supplement to my current income from Social Security, pensions, etc…

I would divide the $300k between a ladder of CDs that would hopefully cover the first five years of supplemental payments and a conservative balanced mutual fund like Windsor or Wellington that would hopefully provide an opportunity for some modest growth.

As the years roll by you should be able to gradually sell the mutual fund and replenish the CDs.

Until you actually have this $300k in hand I would look at options that are possible with current income and investments.

I wouldn’t stress over it, just put one foot in front of the other and things will work out.
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thank you!
 
OregonGuy said:
so what's a better way?
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In theory, I think the 'better' way is to invest the money in a reasonable allocation between stock (S&P500 index or Broad Market Index) and bonds, and then rebalance each year to keep the desired AA.

But, I watched some annuity youtubes yesterday, and maybe your case would be a situation where an annuity might be best. Might, or might not. Also, from what I watched, it seems there can be annuity-riders that allow a larger amount to be withdrawn for LTC situations (nursing home).

I don't know anything about CCRCs, but you might want to look into that option, I think with those instead of buying an annuity you give the money directly to the retirement community and then pay an additional amount of money per month according to which type of unit you occupy (independent, assisted, nursing care).

Assuming you know the area you want to live in, it could be a great opportunity for you to go tour various assisted-living and CCRCs and discuss the costs and options, and that way you could have a specific plan ready for when/if you get the money from the house.

And I think it is actually good you don't have the money yet, because you'll be able to take your time and not be pressured to sign anything.
 
HoneyNut said:
In theory, I think the 'better' way is to invest the money in a reasonable allocation between stock (S&P500 index or Broad Market Index) and bonds, and then rebalance each year to keep the desired AA.

But, I watched some annuity youtubes yesterday, and maybe your case would be a situation where an annuity might be best. Might, or might not. Also, from what I watched, it seems there can be annuity-riders that allow a larger amount to be withdrawn for LTC situations (nursing home).

I don't know anything about CCRCs, but you might want to look into that option, I think with those instead of buying an annuity you give the money directly to the retirement community and then pay an additional amount of money per month according to which type of unit you occupy (independent, assisted, nursing care).

Assuming you know the area you want to live in, it could be a great opportunity for you to go tour various assisted-living and CCRCs and discuss the costs and options, and that way you could have a specific plan ready for when/if you get the money from the house.

And I think it is actually good you don't have the money yet, because you'll be able to take your time and not be pressured to sign anything.
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Thank you!
 
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