OVERVIEW

Today, many elderly Americans who cannot afford the ongoing cost of home care, assisted living or nursing home care are faced with the decision of whether to use their homes as a source of funding to pay for care. As many seniors have significant equity in their homes and since traditional Medicare does not pay for assisted living or personal care at home, using one’s home to finance long-term care can be a good option. And sometimes it is the only option. (Please note that some Medicare Advantage plans might cover the cost of personal care assistance at home and in assisted living residences.)

While there is more than one way to generate revenue from a home to pay for care, not every approach is appropriate for all seniors or necessarily a sound economic decision. This article explores four different ways a home can be used to pay for care and when, and for whom, each method is appropriate.

The four relevant options are renting the home, selling the home, getting a reverse mortgage, and getting a home equity line of credit. However, each of these options is not available to all homeowners. The best course of action depends on one’s family situation and in what location one will receive care.

The table below describes the different types of family situations and the options available to them.

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