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How to Pay for Independent Living

By Kara LewisSeptember 24, 2021
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If you or your loved one is an active, healthy senior looking for more socialization and a maintenance-free lifestyle, you might be considering independent living. While independent living provides benefits like activities, dining services, and regular housekeeping, it doesn’t include help with personal care or medical services.

For this reason, paying for independent living more closely mirrors paying for an apartment or condo, rather than other types of senior living communities. So, when evaluating how to pay for independent living, seniors should expect to rely mostly on their own funds instead of outside resources. Read on to learn how to pay for senior independent living using common methods.

Knowing what costs to expect

The first step in affording independent living is fully anticipating its costs. The median cost of independent living rings in at $2,552 per month, according to data insights from A Place for Mom. However, this range can vary widely based on a community’s location, size, and amenities. As with other senior care types, independent living costs peak in major metropolitan areas.

Seniors can better understand whether a community fits their budget by asking some key questions:

  • Are the community’s rent costs all-inclusive? Do residents have to pay extra for meals and amenities like fitness classes, and beauty salon or barbershop services?
  • Does the community have move-in specials? Some facilities offer discounts based on what month a senior moves in or their lease length.
  • Does the community offer differently priced floorplans?
  • Is it possible to cut down on rent costs by living with a roommate?
  • Are there any one-time costs seniors should prepare for, such as a community move-in fee?

Additionally, seniors can consider what expenses independent living can remove from their budget. While their rent costs may rise, all-inclusive independent living may reduce or fully eliminate spending on food, transportation, housekeeping services, and more.

Paying for independent living using personal funds

When it comes to how to pay for senior independent living, most people turn to personal savings. This can include pensions, retirement accounts, and investments.

If seniors have a source of income — such as Social Security payments or paychecks from a part-time job — they can put this money toward their rent in an independent living community as well.

Paying for independent living using insurance

Many seniors have invested in insurance policies to be proactive about the costs of long-term care and senior living. But does insurance cover independent living costs?

Independent living and long-term care insurance

Long-term care insurance — also called senior care insurance — differs based on a senior’s specific policy and what company provides it. In most cases, however, these policies help with health and personal care costs, making them more applicable to assisted living, memory care, and skilled nursing facilities.

Generally, seniors can use their long-term care benefits when they require help with two or more activities of daily living (ADLs)  — such as bathing, toileting, or getting dressed — or when a doctor has determined they’re experiencing cognitive impairment.

Since independent living doesn’t incorporate help with ADLs or dementia care, long-term care insurance typically doesn’t cover costs associated with this care type.

Independent living and life insurance

Seniors often buy life insurance to continue providing for their families financially after passing away. But in cases where older adults need to free up money for senior living, life insurance policies can serve as a reliable and substantial cash reserve. Policyholders can explore many different options, such as:

  • Selling the policy
  • Surrendering the policy in exchange for its cash value
  • Taking out a loan, then paying the money back into their life insurance fund
  • Setting up a living benefit program, which allows seniors to use some life insurance funds while preserving the remainder for family members

If you use life insurance to pay for independent living, it’s vital to consult your insurance company to understand specific regulations and details.

Paying for independent living using assets

Older adults moving into an independent living community often sell their home to fund the transition. Seniors and their families should reach out to a real estate agent to discuss selling a home to pay for senior living. Notably, senior real estate specialists — agents who have experience working with older adults, in particular — can prove to be a trustworthy and knowledgeable partner in this process. Seniors and caregivers can find a senior real estate specialist in their area through the National Association of Realtors’ database.

Though it’s a less traditional option, retaining one’s house and using this family home as an investment — as in renting it out to another individual or family — has become an increasingly popular strategy. Oftentimes, this can be more lucrative from a long-term perspective. It can also be surprisingly stress-free: Investment companies like Knox Financial work with older adults to take on tasks like finding tenants, determining rent prices, and managing the property.

A house stands out as a majority of seniors’ most significant asset, but selling other items helps generate value, as well. For example, a couple moving into independent living may consider sharing a vehicle and selling their second car.

Do any public benefits pay for independent living?

Many public benefit programs seek to help seniors cover health care costs, which independent living doesn’t encompass. The following public benefits don’t typically pay for independent living:

  • Medicaid and Medicare. These programs serve as federal and state health insurance programs for vulnerable populations — like older adults and low-income citizens — who would otherwise be unable to afford necessary care. Independent living doesn’t fall under the range of covered health care services.
  • VA benefits like Aid & Attendance and Housebound benefits. These programs typically stipulate that a veteran must require help with ADLs, a service independent living doesn’t provide.

In some cases, seniors in independent living may coordinate care through a home health agency. Medicaid, Medicare, and VA benefits typically cover these services when prescribed by a doctor.

Though rare, some public benefits may help seniors manage independent living costs. In many situations, the following public benefits do help pay for independent living:

  • Housing assistance. The U.S. Department of Housing and Urban Development (HUD) offers housing vouchers to very-low-income seniors under Section 202. Seniors are not expected to repay these vouchers. It’s important to note that not all independent living communities accept Section 202 vouchers as payment. Income requirements vary based on a senior’s area of residence, so seniors interested in receiving vouchers should contact their local HUD office.
  • Supplemental Security Income (SSI). Also intended for very-low-income seniors, SSI payments provide an additional stipend for eligible older adults already receiving Social Security benefits. Generally, a single senior’s estimated net worth must be less than $2,000, or $3,000 for a senior couple. Interested seniors should begin the application process by calling Social Security representatives at 1-800-772-1213 or by visiting their local Social Security office.

Talk with a Senior Living Advisor

Our advisors help 300,000 families each year find the right senior care for their loved ones.

Planning for when independent living isn’t enough

Seniors typically choose independent living when they’re active and healthy but desire a more social, maintenance-free lifestyle. This empowers older adults to form new friendships, indulge in amenities, and enjoy their retirement with less stress.

Yet as they continue to age and require more care, seniors may find that independent living no longer meets their needs. As they assess how to pay for independent living, seniors can be proactive by also planning for what comes next, including payment options for assisted living.


Centers for Medicare and Medicaid Services. “What are my other long-term care choices?”

Centers for Medicare and Medicaid Services. “Long Term Services & Supports.”

U.S. Department of Housing and Urban Development. “Section 202 Supportive Housing for the Elderly Program.”

Kara Lewis

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