Placing a parent into aged care can be stressful for everyone involved. There are many factors that make this a stressful transition, and one of them is your financial plan. Families must come up with a considerable amount of money to move an elderly family member into aged care–a number that may only increase in the future.
There are two primary costs associated with aged care: accommodation and care fees. There are also extra-service fees such as hairdressing, outings, and wine with meals that can add up considerably over time. You have several options when it comes to helping Mum or Dad pay for aged care and selling the family home is just one of them.
- Selling the family home The bulk of most people’s wealth is tied up in their home. If there is no pressing reason to keep the home, this can be the most natural and most obvious way to fund aged care. One thing to keep in mind is your mum or dad may have surplus funds after paying the refundable accommodation payment (RAD) that will need to be invested. It’s best to discuss this with professional aged care financial advisers in the Northern Beaches to ensure that you understand your family’s options and don’t miss out on an excellent opportunity.
- Selling down investments and keeping the house While it may make sense to sell the house for many families, it may not be the best option for others. For these people, it may make more sense to sell other assets. Making this choice requires an understanding of your mum or dad’s specific financial situation and the implications of keeping the house and using investments instead, so be sure to enlist aged care financial services in the Northern Beaches for full peace of mind.
- Equity release This strategy is not common, but it’s not unheard of: your loved one may be able to use reverse mortgage funds to pay for the accommodation costs of aged care. While selling a house is often the default position, many families want to keep theirs for several reasons, or they may need more time before selling to renovate the property. In these cases, they may be able to borrow against the home, giving them some breathing room to decide what to do while still being prepared to pay the facility.
- Family-paid RAD If an individual is unable to pay their RAD, their family members may step in and assist. This is a relatively common scenario and one that allows elderly individuals to move to their preferred facility. In some cases, one child may pay the RAD to ensure faster entry before the house is sold.
Where to find help with aged care financial planning in the Northern Beaches
At SACFA, our advisers can help you sort through these options and determine which is the best for you and your family. Our company was created specifically to provide advice and planning services for loved ones of elderly individuals moving their parents into aged care. We offer aged care financial advice in the Northern Beaches. If you need to move your parent into aged care, contact SACFA today to learn more about your options.