Your situation is that your income cannot cover expenses. Fortunately, you still have some 401(k) so that you are not behind on your mortgage payment. Your 401(k) may prevent you from being qualify for Medicaid or other types of assistance. But you still want to try and explore.
1) Do not lose your house.
2) If after you calculate how long your 401(k) can last, you may want to do the following arrangement.
a) Consider reverse mortgage. Reverse mortgage will pay off your mortgage balance, if you are qualified for reverse mortgage.
b) Apply for reverse property tax. Because you are low income, your county may qualify you for reverse property tax, i.e., the property tax is held with a certain interest rate and will be paid after the senior permanently leave the house.
c) Sell the house and move to a more manageable setting such as a small condo or rental. If the equity on your house is high enough, you may be able to move into a senior assistant living place which will later on accept Medicaid after your 401(k) is exhausted.
3) After your 401(k) is used up, you may qualify for supplemental social security income.
Supplemental Security Income (SSI) is a Federal income supplement program funded by general tax revenues (not Social Security taxes):
It is designed to help aged, blind, and disabled people, who have little or no income; and It provides cash to meet basic needs for food, clothing, and shelter.
4) But the supplemental income amount is not much. Relying that amount to keep the house is a sort of "dangerous".
Most seniors have to face reduction of assets and with limited assets. Reduce our expenses and eventually move onto Medicaid is a very popular way of living among seniors. The battle is to fight time to have our assets last as long as possible.
5) You may want to try to apply for Medicaid now, and see whether you can qualify. Once you can qualify for medicaid, there are many other related benefits you may be able to qualify, such as utility help, etc. to reduce your expenses.
6) Call the local, county Department of Aging and Department of Family and Health Services to see whether you can get any services or help for seniors. Because the income is limited, any reduced expenses are helpful. Also, if you are home bound for a period of time, say recovering from an injury, you may qualify for home care services up to 20 hours a week. Also, if you talk with a social worker or case manager, they may have more insights and knowledge about local resources such as, senior housing, free meals, etc.
7) You can call your county's department of aging to find out whether there is a regional dental office for the low income and whether you can qualify or not.
Please feel free to follow up.
Fiona Chen, MPA, Ph.D., CPA, ABV, CFF, CITP