Financing Assisted Living for Yourself or a Loved One

Last Updated: July 13, 2018

Assisted living care can cost upwards of $5,000 a month and many Americans have found that they or their loved ones are running out of money to cover their care.

Here are some expert tips to help your finances go further during these difficult times.

Assisted Living Costs

Retirement costs are often much higher than people anticipate and can drastically affect the quality of you or your loved one’s retirement years. Searching for assisted living can be both emotionally and mentally draining, not to mention time-sensitive, which is why families often end up spending more than they need to on care.

With the rising costs of assisted living care and the average monthly assisted living rent, finding quality care that also fits within your family budget can make a situation go from difficult to overwhelming.

In fact, many families are caught in the gap between being able to pay for senior care out of pocket, compared to having low enough income and assets to qualify for Medicaid, which makes finding affordable assisted living a very frustrating dilemma. Don’t lose heart, though, as there are ways to help make financing assisted living easier.

Since assisted living costs differ by state, it’s important to do your research and creatively cut costs depending on your geographic location and individual situation. The chart below can help you decipher average costs by state.

Average Assisted Living Costs by State

According to Genworth Financial’s Cost of Care Survey, the average monthly assisted living cost in the U.S. was $3,750 and the average monthly assisted living cost by state can be found below:

Tips for Financing Assisted Living

Even though assisted living can be expensive, it’s important to know that there are plenty of strategies that can help you fit quality senior care into your budget.

Here are a few tips for financing assisted living and cutting spending:

1. Compare Locations

If you have family members in different areas and states, it might be worth it to find out if they live in an area where the cost of senior care is less expensive. For example, assisted living in Alaska and New Jersey average a monthly cost of $6,000, yet Alabama and Missouri average $2,500 a month. As with other types of housing, the cost of assisted living varies by location.

2. Consider Paying for Services Separately

Depending on your loved one’s needs and whether your assisted living community offers a la carte pricing in addition to all-inclusive pricing, you may want to consider doing some services yourself. Family members or volunteer services may be able to fill in the gaps in a more cost-effective way. Keep in mind, though, that for some families an all-inclusive option might be more affordable, especially in some geographic areas where the cost of living is higher.

3. Discuss Move-In Incentives and Negotiate Price

It doesn’t hurt to ask whether there are any move-in specials or ways to negotiate price. Not all assisted living residents require the same level of care. Those who need help with fewer aspects of daily life will often pay less than those who need extensive services; so you might be able to bring the monthly cost down, simply by asking.

4. Look at Estate Planning Options and Long-Term Care Insurance

Some Americans find that estate planning can help fund assisted living costs and others qualify for long-term care insurance for senior care. Long-term care insurance can address a gap in coverage not covered by out of pocket expenses, like Medicare or Medicaid.

5. Plan Ahead

If you and your loved ones discuss retirement and senior care early, everyone is more prepared to act during pressure. Researching senior care communities ahead of time to find the ideal place and get on the waiting list also helps. A Place for Mom ‘s financial expert, Andy Smith, Senior VP of Financial Planning at Financial Engines and host of the call-in radio program, Investing Sense, provides financial planning to families on a daily basis and was kind enough to offer his guidance:

“It’s important to have the ‘tough conversation’ about finances and senior care sooner rather than later. On the radio program, we talk about wanting people to do this while everyone’s healthy and sharp. The longer you wait, the more difficult and expensive these talks may be.”

6. Research Benefit Options

If you or a loved one’s spouse has served in the armed forces, they may be eligible for Veteran’s Benefits to help fund care. Social security benefits are the most common way Americans fund retirement, so make sure to include these benefits in financing care.

7. Share a Room

Often senior living communities offer shared rooms at more of an affordable rate. Many seniors benefit from having a roommate for social reasons as conversing and having company can increase happiness, so it doesn’t hurt to also cut costs if this situation works for your loved one.

Ways Your Family Can Finance Assisted Living

According to A Place for Mom’s Senior Living Price Index, the average monthly cost of a one bedroom apartment in an assisted living community is $3,823 per month. Paying for care requires understanding options through careful planning and research.

These additional resources can also help you with financing assisted living care:

• Elder Care Cost Comparison
• Senior Care Cost Calculator
• Senior Living Price Index
• State Guide to Assisted Living Records and Reports

Read more about the how to finance assisted living care or contact a Senior Living Advisor for free expert help.

Do you have any tips for financing senior care? Share your strategies with us in the comments below.

Related Articles:

• Are You Ready to Pay for Long-Term Care When You Retire?
• How Life Insurance Can Help Pay for Long-Term Care
• 10 Ways to Beat the High Cost of Assisted Living