En español | Money becomes an important issue for many of us as we get older. How to pay for necessities such as food and utilities can pose real issues. Thankfully, there are state, federal and private programs to help older adults save, and even create, income. It may take a bit of research, but assistance is out there for those who are eligible.
See also: How to manage someone else’s money.
A good place to start is AARP’s Benefits Quicklink tool. With this feature, users can find programs and resources that will help with the cost of utilities, food, medical costs and more. The process takes only 15 minutes, and all information is secure and kept private. Click here to get started.
If your loved one owns a home and has a significant amount of equity in it, a reverse mortgage can free up funds to help pay for health care needs and other necessities. Unlike a traditional mortgage, a reverse mortgage does not require monthly repayment and the money that is released is borrowed against the equity in the house. This can be ideal for older adults who have paid off their homes over the years and whose residence has appreciated significantly.
Funds released from a reverse mortgage can be paid out in a lump sum, a monthly advance or in the form of a credit line. These options can be combined as well.
Repayment of the reverse mortgage must be made in full — including interest and other charges accrued over the course of the loan — when the home is sold, or the owner(s) moves out permanently or passes away.
The downside to a reverse mortgage is that the more that is borrowed, the less profit there will be upon the sale of the property. Consider a reverse mortgage an advance on the profit that may be made on the sale of the house. These loans can also be costly and sometimes risky. Make sure you do ample research before taking out a reverse mortgage loan.
For more on reverse mortgages, check out these additional AARP resources:
Save on medications
If the person you’re caring for has Medicare Part D coverage, you can help him or her save money on medications, and maybe even avoid falling into the coverage gap or “doughnut hole” by using the Doughnut Hole Calculator. Check out our Frequently Asked Questions page to learn more about the calculator.
Other ways to save
When money becomes an issue, it’s important to exhaust all options for saving. Clipping coupons and shopping during sales are obvious suggestions. Another idea is to switch to generic medications. This may not always be an option — and some loved ones may resist it — but savings can be had when switching off of brand name medications. The FDA requires that generic drugs be of the same quality as brand name medications, so fears about the efficacy of generics can be calmed. The savings can be well worth it — $20 to $40 a month by our estimates.
Dining in instead of out is an obvious way to save. Suggest that your loved one cut back by one restaurant meal a week.
Utilities may offer opportunities to save. Premium cable channels can do a number on monthly bills. Assess whether your loved one is watching enough of these channels to warrant the charges. Lining up a subscription-based movie service may be more cost effective. Phone plans, both landlines and cellular lines, should be looked at as well. Is your loved one using all of his monthly minutes? If not, consider adjusting the plan. Lastly, if your loved one is using cable, phone and Internet, find out if there is a bundled option that costs less than individual services.
For more money-saving tips, check out our Quick Tips for Saving Hundreds per Month.