The Home and Not Much Else (Part 1)

In this week’s post, I address a common problem we see often in our office.  An elderly client owns a home but very few other liquid assets.  Income from Social Security and pensions is enough to meet monthly expenses – but then things change.  Long term care becomes necessary.  That’s when the status quo no longer works.  Expenses will far outstrip income.  So what are the options?

There are a number of choices.  Which ones work best depends on the type and amount of care needed and where it is administered.  In making a decision it is important to be as realistic as possible about the situation and to recognize that change may be necessary with very little notice.  Navigating the long term care journey can be a roller coaster ride.  

Care needs will typically increase over time as a person’s health deteriorates.  This is typically gradual but it could also be sudden.  Consideration should be given whenever possible to implementing a plan that has flexibility to enable a shift in care if and when it is needed.

The available options will involve tapping into the home’s equity.  That could be done by selling the home or borrowing against that equity.  In some cases, the equity may not be needed at all.  I’ll get into the details next week.