How to Pay for Long Term Care with a Reverse Mortgage

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How to Pay for Long Term Care with a Reverse Mortgage

Aging is a necessary topic that very few like to discuss.  We avoid it like the plague – For better or for worse (in most cases).   Our level of understanding when it comes to aging is usually passed down by observing those before us age right in front of our eyes.  And at their expiration, that’s when we typically discover whether they were informed or unfamiliar with the proper way to age.    


Yes – there is a proper way to age that is centered around retirement planning, long-term care policies, and your overall health.  When we think of retiring our main goal is reaching the deadline to stop working.  But what we fail to consider is the growing liability of no longer generating an income.  What else should come to mind is with age comes deteriorating health and the increased cost to keep going.    And this is where we address our topic – 

How can you afford to age gracefully without having a significant retirement plan?  How would you pay for home modification for either you or a spouse?  Who can afford to pay for Long Term care or in-home care out of pocket?  Let’s not forget about healthcare.  You see retirement isn’t all about vacationing and picking up new hobbies or no longer working.  That’s just the first half – No one wants to run out of money or use their nest eggs just to maintain the bare minimum.   

We may not all have a $1MM - 401K or be mass affluent but what most people do have is a home that consists of housing wealth.  Housing wealth that you can liquidate with a reverse mortgage – Yes, a reverse mortgage.  I know some of you may have heard that word before and I’ll explain what that is later.  But a reverse mortgage can provide you with the freedom you want earlier in your retirement while allowing you to age gracefully in the later years of retirement while taking care of all the priorities in between.   

When Should you Consider a Reverse Mortgage for Long-Term Care?  

Reverse mortgages can immensely help seniors despite their current living situation. It doesn’t matter if you’ve tackled retirement planning earlier in life or if this is your first time discussing the topic.  There’s usually a way to structure the reverse mortgage to satisfy your long-term financial needs.  

This plan is not dictated by a senior’s lifestyle or state of health. Seniors can be...  

  • Single and fair health  
  • Married and fair health  
  • Single and in need of assistance   
  • Married and one spouse needs assistance   
  • Married and both spouses require assistance  


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Paying for Care with a Reverse Mortgage   

Using a reverse mortgage to help financially aid an elderly loved one’s care may seem unusual, but after some reflection and added insight - a reverse mortgage may be the best option.   There are many cases where the senior or person in need doesn’t have a long-term care policy in place.  Despite the reasoning - their current health has determined that they need someone’s assistance for their day-to-day living on an ongoing basis.  And in most cases, their first pick is either you or another friendly familiar face. (Other Relatives) With that responsibility typically comes a financial sacrifice from both the cared for and caregiver.   At some point, you’ll begin to feel the strain of trying to maintain the current lifestyle of your elderly loved one while trying to raise a family of your own.  A reverse mortgage can be used to not only offset costs, but it can also compensate the caregiver for making the necessary sacrifices of tending to their loved one/s.  

Additionally, a reverse mortgage as a form of caregiving payment can be a strategic method to help an individual’s Medicaid eligibility.  By doing this, you can keep some of the home’s value within the family. When the elderly homeowner moves into a Medicaid-funded nursing home, they are required to sell their home. The bank is then re-paid the reverse mortgage, the family member who acted as caregiver keeps all payments received, and the elder individual is more eligible for Medicaid. This scenario is complicated, so it is helpful to consult with a Medicaid planner to see all your options.   

Quick Things to Consider:   

  • There are no restrictions on how the money can be used.   
  • Borrowers never give up the ownership or title of their homes.   
  • Reverse mortgages are non-recourse loans. The borrower/s will never owe more than what their home is worth.   
  • Reverse mortgages typically take 4-8 weeks (about 2 months) to process.   
  • Reverse mortgages do not impact any common government benefits the individual may be receiving. However, some specialty programs may be affected by the reverse mortgage depending on the state.  


Aging comes with a laundry list of stress-inducing responsibilities and duties. Taking care of an aging loved one should not be one of them. Reverse mortgages can help ease the financial burden of at-home care and provide peace of mind that your loved one is receiving the best care. Reverse mortgages can financially support your elderly family member in the present and future, so they can live prosperously in their remaining years.   

We hope that this blog was informative and helped in your decision-making process. For more information regarding reverse mortgages, please contact us. PCL Financial Group is here to help you with all your financial inquiries.