By Katharina Schulten, Director of Marketing and Hospitality at Twin Towers
“How much money do I need to qualify?” This is a question we often hear, and most people are surprised to learn the answer is not so clear cut.
Most communities will qualify applicants based on several factors related to their financial picture, here are the most common:
Factors Taken Into Consideration For Qualifying
Because the future is unknown, lifetime projection models rely heavily on historical statistics, sometimes national or regional. Forecasting for the ability to pay fees depends greatly on the time frame that is being considered.
This is calculated based on the age of entry to the community and the estimated length of time an individual will live in the community.
All income streams are typically considered and important to report because they provide a baseline for paying monthly fees.
Stable and ongoing income source - social security or a pension
Variable sources of income - dividends and capital gains
Market volatility/variability means that some average or a conservative estimate of that income may be used in the calculation based on the overall asset value.
Also share income sources that you may only draw on annually because they will be taken into account on a forecast. Be certain to include their planned end dates.
IRA (Individual Retirement Account) or 401(k)
Rental income or a structured settlement
Essentially, any type of income that gets reported to the IRS should be included in any projection.
Although personal items may have great value, typically, only liquid assets are considered for a community qualification. Assets most often include property, savings, and investments.
Most often, the proceeds from the sale of the house/condo are used to pay the entrance fee. Assets are important because they may be needed to supplement your income to pay monthly fees as an individual moves to higher levels of care, especially if the community you have selected is a CCRC.
Entrance and monthly fees are defined by the size and location of the accommodation as well as the number of people that live there. Fees may vary widely within a community and someone may qualify for several or all of the accommodations. The full scope of your financial landscape will determine the accommodation options.
Know Your Numbers
Now that you know what considerations are made when determining what accommodation will work best for you, consider taking inventory of your current financial situation.
- Familiarize yourself with your current income streams and assets. Consult your most recent investment statements and tax return. These are key elements to consider along the community’s entrance and monthly fees.
- Research your house value. Most counties have a public website listing the house value for tax purposes. Unless you have a committed buyer and signed purchase agreement, most communities will only use the tax value of your property because it is an objective estimate.
- Create a lifestyle budget. Most communities include a package of services provided through the monthly service fees. These can vary widely from community to community and are based on the contract type associated with that community. Do your best to understand what services are and are not included in the service package, request a list if that is available.
- Post-Career Living. Outside of what services are provided, take time to consider what lifestyle you want in your post-career life. Do you plan to travel every year? Do you want to eat out every night? Will you purchase the car you’ve always wanted? Listing these expenses to create your lifestyle budget will help you compare your current living costs with those of a community.
At Twin Towers we also offer a complimentary financial review to interested individuals. With age, monthly income, asset, house value, and lifestyle expenses, a Sales Counselor can use the financial approval guidelines for our communities, and then provide a list of patio home and apartment accommodations that match your individual situation. Contact us here to schedule a visit or give us a call at (513) 853-2000.