Your elderly parents or other aging loved ones might need substantial care, and so might you some day. Nursing homes and similar institutions can be unfamiliar and expensive. If you want care delivered at home, your parents can hire someone to come in:
* Home-care aides, also called personal aides, serve as companions. They typically help with activities of daily living such as dressing and bathing; some will do household tasks such as food preparation and laundry, too.
* Home health aides may do all the things a home-care aide will do, as well as provide medication and monitor medical conditions.
To find out what level of care your loved one needs, you can hire a geriatric care manager for an in-home assessment. The National Association of Professional Geriatric Care Managers (www.caremanager.org) can help you find a local member; expect to pay $500 and up for the visit.
Then you’ll probably pay $15-$25 an hour if you hire a home aide. The more training the aide has and the more services the aide will perform, the higher the fee you’re likely to pay.
Where will the cash to pay for such help come from? If savings aren’t sufficient, one source of income is tapping home equity with a reverse mortgage. What impact will that cash have?
* Income taxes. Money you get from a reverse mortgage is treated as money you have borrowed. It’s not taxable income.
* Medicare. Again, the cash flow from a reverse mortgage is not taxable income. Therefore, it won’t affect the amount you pay for Medicare Part B. High-income seniors pay extra premiums for this medical coverage.
* Medicaid. To qualify for Medicaid, you must have limited assets and income. Receiving cash from a reverse mortgage won’t impact eligibility. However, if you accumulate that cash in the bank or in an investment account, you might no longer qualify for Medicaid.