The cost of assisted living is typically billed monthly. Many communities offer tiered pricing, so that residents who need or want fewer services can pay less, with costs increasing as more services are included.
Those who are now living independently but explore assisted living as a potential option for the future often find that the cost seems high. But they usually are not making an apples-to-apples comparison. Far from being “just an apartment,” assisted living includes many living expenses you might take for granted.
Living Expenses Included in Assisted Living
Daily meals are usually one of those expenses. Many people vastly underestimate their monthly costs for food. Not only are residents of assisted living communities spared the expense of buying food for their meals, they are spared the time and effort of shopping for and cooking all of their meals.
Utilities, such as electricity, water and gas service are also typically included, as are maintenance of the grounds and the living quarters themselves. Then, too, there are some benefits of assisted living whose costs are difficult to quantify, such as greater measures of safety, security and community. So while it’s true that costs among different communities themselves can vary widely, when comparing the cost to independent living, be sure to take all that is included into account.
We can, however, make some generalizations about costs. According to Genworth’s 2016 Cost of Care Survey, the median average cost for assisted living in the US is $3,628 per month, or $43,539 annually. The level of services provided and other factors can cause the costs of communities in the same area to vary widely. Cost will also vary by region. Where the general cost of living is higher, the cost of assisted living will most likely be higher as well.
How to Pay for Assisted Living
Most people pay for assisted living through their own financial resources. This might mean using some combination of a pension or annuity, plus savings and investments. Sometimes financial help from one’s children or other family members comes into play.
Seniors who own the home they live in might see that asset as an ideal way to finance the cost. They may, for instance, choose to sell their home outright and use the proceeds to pay for assisted living. Or they may rent the home. A third option is a reverse mortgage, which allows one to borrow against the equity of the home while retaining ownership of it. If you decide to use your home or other real estate you own as a means to finance your care costs, be sure you understand all of the details and ramifications of such an arrangement.
For many, long-term care insurance offers a good way to finance a comfortable lifestyle at the facility of their choice. Do your homework, though, because several factors can affect your long-term care insurance costs and benefits. Some government programs, such as veterans’ or Medicaid benefits, may help pay for care, though that help may be somewhat limited. Medicaid policies vary greatly from state to state.
Few people factor senior living care into their long-term financial planning. While there are understandable reasons for this, the more you plan, the more options you will have should the need arise. Still, chances are there are assisted living communities near you that will meet the needs and budget of you or your loved ones.