What Are the Options for a Living on Their Own Invalid Who Is Running Out of Money?

Dear Mr. Miller:

My third husband died a few months ago.  He was my caregiver as I have been an invalid for 4 years.  I am not sure what to do now as a full time caregiver is going to cost close to $10,000 per month and I just don’t have that much money coming in and no long term care insurance.  Fortunately, I do have about $300,000 in the bank and I own my house free and clear.  Do you have any suggestions?

Widow and Worried

Annuity with Long Term Care Insurance
Reverse Mortgage
Government Benefits (Medi-Cal & Veterans Benefits)
DIC
Survivor’s Benefits
Continuing Care Residential Community
Call Us

Dear Worried:

You are probably not as bad off as you think as you have several options.  Some people wait too long to ask for help and have none.  The key is to seek out answers before everything is gone, because once it is, there may be no answers.

Annuity with Long Term Care Insurance:  You have money in the bank.  Of course, you could just spend what you have and hope for the best–but that’s not the recommended approach.  You don’t say whether the accounts are IRAs or just regular savings account but in either case you may be able to invest in an annuity combination with long term care insurance.  I regularly work with experts in this field.  Basically, you purchase an annuity that allows you to withdraw for things covered by the long term care option in the policy. You would purchase this annuity with a portion of the money you presently have in the bank.  Whether you can still qualify is an open question.

Reverse Mortgage:  There is the option of a reverse mortgage drawing on your equity in your house.  The money does not have to be paid back until you die or move out.  If you needed to move to an assisted living or skilled nursing facility that would trigger the pay back requirement possibly requiring the sale of the house.  Whether the sale of the house is a deal killer or not is an issue that needs to be discussed.  Again, this is not something to just jump into but requires analysis and expertise.

Government Benefits (Medi-Cal & Veterans Benefits):  Then there is the option of government benefits.  We often discuss Medi-Cal as a solution.  (Note that as of 2023 the net worth limit has increased to $130,000 for the applicant).  But let’s talk about another potential option.  If any of your spouses were veterans and that marriage was terminated by his death, you may be able to obtain Surviving Spouse Veteran’s Benefits.  There are two types, (1) Survivor’s Pension and (2) Disability and Indemnity Compensation (DIC).  The first is “means tested” meaning you have to qualify based on income and net worth.  The second is not means tested and the benefit is about 50% more than the first.

DIC:  DIC is for survivors of Veterans who die (1) while in active duty service or )2) from a service connected disability or (3) from a non service connected injury/disease and were receiving or entitled to receive VA Compensation for a 100% service connected disability. The rates used to  be higher for commissioned officer but no longer are.  The basic monthly rate is $1563 and can be increased up to $2100 or even higher depending on the circumstances.

Survivor’s Benefits:  We discussed Survivor’s Pension through the VA here.

Continuing Care Residential Community: These communities usually require an up front buy in.  They provide independent living and assisted living and sometimes skilled nursing facilities.  Assuming you could afford the buy in and the monthly payments that would be required, this may be an option as well.  We previously discussed the benefits and detriments here.

Call Us:  So bottom line, you have a number of options but you need to speak to someone knowledgeable in the field who can bring in whatever additional expertise is needed.  Give us a call at 760-436-8832 so we can assist you.