Whether it is done independently or with the help of trusted advisors, seniors must organize their finances in the case of a crisis, but more importantly, before a crisis happens.
The dreaded “health crisis” – a situation where a senior suddenly suffers injury or illness that requires treatment in a hospital – is usually what spurs families to organize the senior’s finances, health coverage, further treatment, and living arrangements. The drawn-out task of reorganizing a senior’s life after a health crisis is painstaking and sensitive to error; which can happen easily if done in a hurry. With financial planning done ahead of time, families can react with poise not only to health crises, but to accidents, housing issues, unexpected expenses and scams targeting seniors as well.
Senior citizens are at higher risk of health problems than younger, healthier adults. Long-term care necessitated by senior health problems can amount to the largest financial burden seniors and their families will ever encounter. The annual national median cost for a private room in a nursing home is $108,408, according to Genworth.com. Imagine a senior who requires this living arrangement for five years. Their total expense for long-term care would add up to $542,040. That can be up to 10 years’ worth of salary for an average middle-class American.
Health insurance policies may cover the cost of in-patient care and some rehabilitation. But non-medical, long-term care is a different, sometimes larger expense that seniors and families must plan for. Fortunately, when looking for funds to pay for long-term care, you can find relief in senior benefits.
Senior benefits tend to activate once an adult reaches the age of 65. Though some are the same for every senior across the country, certain benefit limitations vary from state to state. Through senior benefits, you can find extra money or financial relief that will enable you to pay for important things like long-term care. Your financial planning, or the planning you are doing for an elderly loved one should factor in these ten benefits. Through this article, you can learn what these benefits are, whether you qualify for them and how to receive them.
1. Social Security Retirement Benefits
– The most well-known senior benefit you should remember for financial planning is Social Security. Social Security is a vital source of income for an average of 65 million retired Americans per month. It is designed to replace all or much of your working wages with monthly checks paid to your name. Healthy saving habits can prevent you from becoming reliant on Social Security alone, but if you require it, you can easily begin collecting.
Do you qualify? To apply for social security retirement benefits:
- You are at least 61 years and 9 months old
- You are not currently receiving benefits on your own Social Security record
- You have not already applied for retirement benefits
- You want your benefits to start no more than 4 months in the future
How to apply – You can apply for Social Security retirement benefits online. If you do not wish to use the online application, you can set an appointment at your local Social Security office OR call
2. Retirement Plans
– You may have a pension plan or 401(k) from the company you were employed with before retirement. These retirement plans provide a steady stream of income once you retire.
Your pension is a contribution made by your company based on covered earnings and years of service. Pension benefits are usually paid in lifetime monthly payments. However, you can make an educated decision to receive your pension in one lump-sum payout. This option is becoming increasingly available through more companies today. Read this guide from Consumerfinance.gov to find out if the lump-sum payout option is right for you.
Your company may have offered you a 401(k). This plan was secured during your employment, when you withheld contributions (which may or may not have been matched by your company) from your paycheck.
Do you qualify? Vesting, or acquiring the ownership of a retirement benefit, is the key to securing a pension benefit. Under your pension plan, you are either fully vested or not at all. Ask your benefits administrator about what type of vesting applies to you. Once you are vested, you are eligible to receive your pension as long as you are 55 years of age or older. Note that receiving pension benefits before you reach full retirement age (which ranges from age 65 to 67, depending on what year you were born) will affect the size of your monthly payout.
According to this IRS resource guide, you received a summary plan description (SPD) to understand the details of your 401(k) upon hire by your employer. Know the provisions that apply to you and be familiar with your plan provider. Your retirement age was most likely defined under the plan. This is when you can receive its benefits.
3. Senior Discounts
– Retailers, restaurants, hospitality companies and other vendors allow seniors to pay discounted prices for everyday product and service necessities. Senior discounts are available everywhere in the places you frequently visit. These are types of places that commonly offer senior discounts:
- Grocery stores
- Retail and apparel stores
- Car rentals
- Cruise lines
- Veterinary hospitals
- Fitness facilities
Do you qualify? Vendors will specify a time and the age limit when seniors can qualify for discounts. Many grocery stores, for example, require recipients to be at least 55 years old. Senior discounts also may only apply on certain days of the month. Simply being aware of these requirements will allow you to plan and budget according to the senior discounts you can snag. Review this list of senior discounts for savings near you!
4. Homestead Exemptions
– This senior benefit will vary from state to state. Annual homestead exemption reduces your property tax burden by shielding some of the market value of your home from taxation. The amount of exemption depends on your state. If you live in California, for example, a $7000 exemption can remove $70 from your property tax bill.
Do you qualify? This exemption is for a property that is occupied as a residence by a person who is 65 years of age or older, the owner of the property and who is liable for paying its real estate taxes. There are also income limits and homestead value requirements that will depend on what state in which you reside.
How to apply – Fill out a form application for Senior Citizens Homestead Exemption. This should be available from your county auditor’s office. If you are approved to receive homestead exemptions, you will be notified by mail.
5. Supplemental Security Income (SSI)
The Benefit – The federal government has a Supplemental Security Income (SSI) program for the elderly, blind or disabled of any age who have extremely low income and very few resources. This benefit provides a monthly cash allowance for recipients in need. It is calculated by subtracting the beneficiary’s countable income from the federal benefit amount. Some states add a small supplement to the federal benefit.
Do you qualify? To be eligible for SSI, your countable resources must be less than $2,000 for an individual, and $3,000 for a married couple living together. Countable resources are cash, and money in bank and investment accounts. This does not include equity in your primary residence, personal property, the value of one family vehicle, burial plots, life insurance policies valued over $1,500, or educational grants.
How to apply – To apply for SSI, set an appointment at your local Social Security office or call
6. Elderly Veterans Benefits
– The Department of Veterans Affairs (VA) provide veterans with benefits and services that address changing health risks and financial challenges. These are some benefits the VA offers:
- Disability compensation
- Education and training
- Health care
- Home loans
- Vocational rehabilitation and employment
- Long-term care
- Financial aid pensions
Since long-term care is a benefit the VA can help you with, and because it may be your largest expense, learn how you will be able to pay for it. Do you have coverage through the VA, Medicare or Medicaid? Do you have long-term care insurance? Your eligibility for long-term care services through the VA is determined based on your need for ongoing treatment as well as the availability of service in your location. Your insurance coverage also applies.
Do you qualify? – The latest available statistics show there are 17.4 million veterans living in the U.S., with more than half that number age 65 and over. If you served in conflicts like World War II, the Korean War, the Vietnam War or the Persian Gulf War, your needs are important and the benefits you can receive for them are well-deserved.
7. The Senior Pass
– If you love to travel, you should take advantage of the America the Beautiful National Parks and Federal Recreation Lands Senior Pass. The Senior Pass gives you access to over 2000 federal recreation sites across the nation, including national parks, wildlife refuges and forest lands. With the Senior Pass you and any passengers traveling with you in one vehicle gain admission and discounts to beautiful locations across the country. This will save you money and motivate you to enjoy the outdoors!
Do you qualify? The Senior Pass is only available to U.S. citizens or permanent residents 62 years of age or older. You must provide a driver’s license, passport or permanent resident card to give photo verification of this.
How to apply – You can obtain a Senior Pass through the mail by completing this application. Mail it including a photocopy of proof of age and citizenship and residency as well as the processing fee. An annual Senior Pass costs $20, with a lifetime Senior Pass costing $80, which covers the cost of the pass itself and the application processing.
You can also apply for a Senior Pass in person at the recreation site you visit. Before making a trip to get the pass, make sure you contact the site to ensure they have passes available.
8. Senior Farmer’s Market Nutrition Plan (SFMNP)
The Benefit – This program provides low-income seniors with coupons that can be exchanged for eligible foods at farmers’ markets, roadside stands and community-supported agriculture programs. Its financial aid encourages seniors in need to maintain nutritious diets. Your state agency, such as the State Department of Agriculture or the Agency on Aging administers the Senior Farmers’ Market Nutrition Program (SFMNP).
Do you qualify? Eligibility for the SFMNP depends on your income. You must be at least 60 years old and have a household income of not more than 185% of the Federal Income Poverty Guidelines, which can be found here.
How to apply – Contact the state agency who administers the SFMNP in your area. Here is a list of SFMNP state agency contacts.
9. Housing and Urban Development Programs
– There are three housing and urban development programs that can factor into your financial planning:
The Reverse Mortgage Program gives a guaranteed monthly income payment to seniors at or above the age of 62 who own their own home. Recipients must also have substantial equity value in the home. Seniors who receive reverse mortgage do not have to pay it back or make interest payments on it, if they continue to reside in their home.
Housing Rehabilitation Grants and Low Interest Loans can be used to pay for health or safety hazards in a senior citizen’s house. You can use these grants or loans to make repairs or modifications in your house so that you have better, safer mobility. They are administered on a state and local level.
A benefit called the Home Energy Assistance Program (HEAP) gives assistance to eligible households for paying a portion of home heating expenses. Eligible senior households receive cash grants to improve their heating systems.
Do you qualify?
For the Reverse Mortgage Program, you are eligible under these qualifications:
- You are 62 years of age or older
- You own your home
- Your home is your primary residence
- You have completed a counseling session with a HUD-approved counseling agency
- Your home is a 4-unit maximum single or family home
- You are financially able to pay your property taxes, home maintenance and any applicable HOA fees
- You are not delinquent on any federal debt
For the Housing Rehabilitation Grants and Loans, eligibility depends on the state in which you are living. Contact your state’s Department on Aging for this information.
Seniors who qualify for HEAP must need financial assistance for home energy costs. This table displays the maximum income level for applicants:
|Annual Household Income Limits (before taxes)|
|Household Size*||Maximum Income Level (Per Year)|
How to apply
This guide presented by the National Reverse Mortgage Lenders Association will teach you how to apply for Reverse Mortgage. Since Housing Rehabilitation Grants and Loans and HEAP are state facilitated, contact your state’s Department on Aging to apply for them.
10. Long-Term Care Insurance
So far, the senior benefits listed above may have already lifted several financial burdens off you or your elderly loved one’s shoulders. Wherever a senior can save money or keep assets is an opportunity to gain financial security and control. Long-term care might seem as the most burdensome financial monster gnawing at your checkbook, but there is a relief for that in long-term care insurance.
How should your elderly have loved one pay for the monumental cost of long-term care? He or she might have a long-term care insurance policy. Long-term care insurance (LTCi) is a valuable tool to protect assets and finance long-term care. this is an investment to consider before it is needed. Without LTCi, long-term care’s costly expenses are paid using either Medicaid (if you qualify for it) or out-of-pocket savings (if you can afford it). Even with these other options, a senior without LTCi may deplete their personal savings or depend on family to pay for or provide care.
The benefit of long-term care insurance will surely play out for you after you have exhausted all other saving and funding options in your financial planning. Long-term care is of highest priority in planning the finances of a senior citizen. These senior benefits will help, but navigating long-term care insurance will help even more.
Amada Senior Care advisors have the knowledge and expertise to guide policyholders in better understanding their long-term care insurance benefits. Amada advisors also help veterans determine if they are eligible for the VA Aid and Attendance benefit. Click here to find the Amada office nearest you and get more information about funding solutions that can help pay for in-home care. At Amada, we are happy to help.
“10 Senior Benefits to Remember for Financial Planning,” written by Michelle Mendoza and updated by Beth Herman, Amada Blog contributors.