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Top 12 Ways of Financial Support for Seniors

Posted on: 04th Nov, 2007 11:59 pm
A stress-free retirement is something most seniors look forward to and flow of cash as and when required can help them achieve it. Be it their day-today expenses, health-care costs or retaining the lifestyle they have maintained so far, there are options that can serve every purpose and help seniors have a relaxed and fun-filled retirement life.

Here's a round-up of the top 12 Ways of Financial Support for Seniors.

1. Social Security


It's a federal benefit offered to qualified individuals who have been paying taxes into Social security while at work. The benefit replaces 40% of a wage earner's monthly income.

2. Supplemental Social Security Income


If social security isn't enough to serve your needs, you can supplement it with an added benefit - the supplemental income. Seniors who are aged 65 or above and disabled persons can avail such benefits.

3. Retirement Plans


Employee sponsored 401k and 403b Plans as well as Traditional IRAs and Roth IRAs are the ones you can contribute to and build up savings for old age. Even if you are 50 years old, you can start contributing but the contribution limit may be higher.

Traditional IRAs, 401k and 403b plans require you to pay tax on withdrawal. At the age of 70 and 1/2 years, you should start taking out a minimum distribution annually.

With a Roth IRA, you can contribute even after 70 and 1/2 using after-tax dollars. And, under certain conditions of distribution, you may not even have to pay taxes on withdrawal.

4. Self-employed Retirement Savings


Aged persons having their own businesses can accumulate savings through the Keogh plan, SEP-IRAs or Simple IRAs.

Contributions to SEP IRAs are higher than that of Traditional IRAs. For Simple IRAs, the contribution is limited to $13,000 for those aged 50 and above and $10,500 for others (in 2007).

5. Long-term Care Insurance


If you are middle aged or 50 years old, then it's the right time for you to purchase such a policy. This insurance policy covers your long term medical costs such as nursing home care, physical rehabilitation and the like. But you need to pay premium and once it stops, you lose the coverage.

6. Medicaid


This is a long term health-insurance program offered jointly by the Federal and State governments. Mostly people having low income and assets can qualify for it. But there are limitations as far as the coverage is concerned and you may get disqualified under certain conditions.

7. Medicare


Unlike Medicaid, Medicare is a short term care Federal program available to anyone aged 65 or even below it if he's disabled. The coverage includes skilled nursing care for limited period, hospice care and others.

8. Reverse Mortgages


This is a financing option for anyone aged 62 or above wherein one can borrow against the equity in his home. Be it renovating your home or paying for long term care insurance premiums or else nursing home costs, a reverse mortgage can help you in all areas.

The best thing is, you need not make monthly payments except under certain circumstances. When the loan term gets over, either the lender takes away your home, sells it and gets back the proceeds with interest or else your heirs pay it off to keep the property intact.

9. Pull out equity


Those who do not qualify for reverse mortgages can take out conventional second mortgage to serve their purposes. It can be either a home equity loan or a home equity line of credit. The latter works similar to that of a credit card; you can thus get cash for immediate purposes. But unlike reverse loans, there are monthly payments and in case you aren't fit and fail to make regular payments, you may possible lose your home.

10. Endowment Insurance Policy:


You can get a good amount of cash from your endowment insurance policy, if you have applied for one earlier at a young age. Such a policy pays out a lump sum amount after a specified number of years or upon death. But you will have to pay more in terms of annual premiums compared to that on other policies.

11. Annuity:


It's an insurance contract which if purchased will give you a series of periodic payments till death or when the term ends. The money used to buy the policy grows tax-deferred until you start getting the payments.

The cash amount becomes variable when the company invests your funds into bonds and other investment options. The best thing is even if you're 50, you can go for it. Know more...

12. Life Settlement Services:


Those in need of immediate cash, that too, in large amount, can take advantage of life settlement services. It's a kind of financing option which allows one to sell his life insurance policy to investors through brokerages. On doing so, the insured can earn more than the cash amount one can get upon cancellation of the policy prior to maturity or before it is payable upon death.

No doubt, there are various options of financial solution for seniors but they need to understand their requirements and choose the one that best fits into their situation.
If a person is old enough to get their medicare is it safe to drop their health insurance plan? Os do they need to keep this expense even if it is a financial burden on them.
Posted on: 11th Mar, 2008 10:54 am
No, I don't think it's a good decision. After all old age is when you need coverages that most health insurance policies offer. Also, Medicare does not offer all coverages for healthcare.

Good luck
Posted on: 12th Mar, 2008 12:25 am
Where would one find out what the medicare is going to offer to get a good plan in place before they get old and have to pay the higher rates because of age.
Posted on: 12th Mar, 2008 09:30 am
Hi jbarto,

I guess you are interested to know what Medicare covers and how it works. Well, it's a good thing that you wish to know about it from beforehand; so in the long run you don't have to waste your time looking for so much of details. :)

To know about Medicare coverage and eligibility in detail, you may refer to http://www.medicare.gov/Library/PDFNavigation/PDFInterim.asp?Language=English&Type=Pub&PubID=10050

Take Care
Posted on: 12th Mar, 2008 11:52 pm
I was not aware that medicare was not that good as far as covegae goes. My mother always lived like a puper and that was all she had as health coverage and she seems to do fine with it or she never complain about it anyway.
Posted on: 14th Mar, 2008 07:52 am
yes there are limitations involved but I suppose every health insurance program has it.
Posted on: 14th Mar, 2008 11:48 pm
I have seen a few things that medicare does not pay, I had an elderly client that it would not pay for her lasix (a water pill). This was medication that was prescribed by the doctor, the problems that I have seen has always been in the prescription drug area of the plan.

Patricia,

Does your mother in law have a lot of prescriptions? There may be things that she has too pay that you are unaware of, or she may have invested in a good plan prior to getting elderly.

Does your husband follow the habits of your inlaws, if so you should be in good shape. Ask your mother inlaw what they have done to become so successful in their elderly age, she may give you some tips on what to do. If she does, please come share with us so that we know.
Posted on: 15th Mar, 2008 05:13 am
Thats a good thought but my hubby is a spend thrift.As long as he has money he spends.Drives me nuts but I can't change him.Than when he is broke we all suffer for it.I see my old age as living as a bag lady. Here is what i do to save money when i go out. I take a cooler and a drink then go to McDonald's and get 2 buggers from the dollar menu and go outside in the car and eat them with my daughter.My hubby?Once he bought 28.00 worth of burgers from a restaurant ! My mother may have had to pay for some of her prescriptions. My mother in-law hardly ever like me goes to a doctor.She hardly ever takes medicine. They worked most of their lives and have used money wisely .Don't know where my hubby got his spend thirft way.I hate stingy men but this is to far in the other direction. He does have good intentions but that does not put food on the table.
Posted on: 15th Mar, 2008 11:36 am
How does a family pay for a nursing home when my grandparents never expected to live this long and they do not have long term care insurance? We don't have the means to come up with the astronomical fees.
Posted on: 25th Feb, 2009 08:31 am
You're really in a tough situation. But your grandparents will have to pay the nursing home dues otherwise, the nursing home can place lien on your grandparents property.
Posted on: 26th Feb, 2009 01:13 am
I worry about my sister. SS isn't enough. Bad health, lots of RX and rising costs of everything leaves her about $1,000.00 in the whole each month. Do you know if there is someone that can help her with her budget or come and talk with her about what she can do? Owns mobile home, can't do reverse mortgage, has several refi's. If she sold her home, she would get nothing. I'm getting ready to leave country and I have helped her all I can. Her son is also worn out financially. Thanks for any ideas you may have. Pat
Posted on: 10th May, 2010 01:12 pm
Hi Pat,

It's good to know that you care so much about your sister. I do hope that she will be able to manage her finances more efficiently and effectively in near future.

A reverse mortgage could have been a good source of steady income for her in this situation. But with no equity in the home, getting a reverse mortgage will not be possible. If she needs someone to help her with her budget, she can look for credit and budget counseling services offered by non-profit organizations. There are various such non-profit organizations which offer help with budgeting to those who need a strict budget to manage finances properly. However, though many of these organizations claim to be non-profit, some of them do charge certain amount of fees.

Your sister can also take advantage of a free personal budgeting tool on this site. This might help your sister in managing her monthly income and expenditure more efficiently and prepare a budget accordingly. The personal budgeting tool can be downloaded from http://www.mortgagefit.com/spreadsheet/personal-budgeting.html
Posted on: 10th May, 2010 11:10 pm
Is there an old age pension availab;e for low income seniors?
Posted on: 06th Jul, 2010 03:08 pm
I don't think there is any separate old age pension available for the low income seniors.
Posted on: 07th Jul, 2010 01:41 am
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