We get asked all the time by families how to budget for the care a parent may need down the road for Assisted Living and Memory Care service.
There are a variety of things to consider. Your loved one's current cash on hand, assets that can be liquidated into cash such as investments, life insurance, real estate, cars, ect as well as their monthly income from sources such as social security, pensions, long term care insurance and even the Aid and Attendance benefit for Veterans and their spouse.
Assisted Living can range from $3500 to over $6000 monthly while Memory Care will generally begin around $6000 and can be as high as $14,000 or more a month.
Average life expectancy in the U.S. for a man is 82 and for a woman is 88.
When trying to determine how long a parents asses may last or if they have adequate assets to private pay for their care needs the basic formula is to use Current Assets plus monthly income less the monthly cost of care.
Let's look at this example using the Angels Care Family Home Care Calculator.
Assumption: Your Mom is 84, she has 48 months till she turns 88. Her total monthly Income is $2500
Cash on Hand $275,000
| Angels Care Family Home Care Calculator | Balance | Balance | Balance | Balance | Balance | Balance | |||
| Beginning Assets | 275000 | year 1 | year 2 | year 3 | year 4 | year 5 | year 6 | ||
| Monthly Cost of Care | 6250 | January | 271250 | 226250 | 181250 | 136250 | 91250 | 46250 | |
| Monthly Income | 2500 | February | 267500 | 222500 | 177500 | 132500 | 87500 | 42500 | |
| Income to Cost Variance | 3750 | March | 263750 | 218750 | 173750 | 128750 | 83750 | 38750 | |
| April | 260000 | 215000 | 170000 | 125000 | 80000 | 35000 | |||
| May | 256250 | 211250 | 166250 | 121250 | 76250 | 31250 | |||
| June | 252500 | 207500 | 162500 | 117500 | 72500 | 27500 | |||
| July | 248750 | 203750 | 158750 | 113750 | 68750 | 23750 | |||
| August | 245000 | 200000 | 155000 | 110000 | 65000 | 20000 | |||
| Sept | 241250 | 196250 | 151250 | 106250 | 61250 | 16250 | |||
| October | 237500 | 192500 | 147500 | 102500 | 57500 | 12500 | |||
| November | 233750 | 188750 | 143750 | 98750 | 53750 | 8750 | |||
| December | 230000 | 185000 | 140000 | 95000 | 50000 | 5000 | |||
| Note: | This Care Calculator is designed to assist families in deciding how to budget for care | ||||||||
| The Care Calculator does not account for variations or changes in Income or Cost of Care | |||||||||
| This calculator may not be reproduced or used in any manner without the express written consent of Angels Care Family Home | |||||||||
Based on the scenario above, your Mom has assets and an income stream enough to support over 72 months of care.