Cost of Senior Living
Understanding the Cost of Senior Living
Making housing and lifestyle plans for the future comes down to a few big questions. Where do you want to live? How long do you want to live there? And what is it going to cost?
This blog post addresses the costs of senior living. Answering your questions about fees for different types of communities, with a focus on what to expect if/when it’s time for assisted living or long-term care.
Finding your new home
Choosing the right senior living community includes not only geographic location, but a decision on whether to rent or buy. Renting can be a good short-term solution if you are not ready to commit. Buying, of course, offers you a more traditional residential solution.
You also have the option of choosing Continuing Care Retirement Care Community (CCRC), where you pay an entrance fee to become a resident. When you leave the community, a portion of your entrance fee is refunded to you or to your estate, helping to preserve your assets.
Be sure to visit different communities to see which fits your personality and lifestyle goals. Also consider proximity to friends, family and doctors, as well as how close you are to shopping, restaurants and other favorite places. Many communities will offer transportation to residents who no longer drive.
Larger communities will also offer on-site conveniences that make life easier. For example, here at Lawrence Presbyterian Manor, our CCRC campus houses a fitness center, library, chapel, wellness programs, learning opportunities, a monthly calendar of activities, events, day trips and more. We encourage our residents to immerse themselves in our engaging and fun-filled lifestyle.
Choosing the right level of care
It is important to understand the different types of senior living communities that are available based on your needs. These include:
· Independent Living
Just what it sounds like, independent living is for active seniors who are healthy and able to care for themselves. Some independent living communities will provide extra services like meals and housekeeping, along with the basic necessities. Levels of security will differ but should include emergency call buttons at the very minimum.
· Assisted Living
Assisted living provides on-site care services for seniors who need some extra help to enjoy full and healthy lives. Care is available 24/7 and can include medication management, physical or occupational therapy, speech therapy, and assistance with activities of daily living (dressing, bathing, grooming). AARP provides a comprehensive assisted living checklist that is helpful when comparing communities and making the right decision.
· Long-Term Care
Also known as skilled nursing care, this option provides a higher level of daily support for more complex medical needs. Residents receive individualized care plans that maximize health and functionality, with a focus on quality of life in a safe, comfortable setting. You can learn more at this website provided by the Administration for Community Living under the U.S. Department of Health and Human Services (HHS).
· Continuing Care Retirement Communities (CCRC)
These communities, which are sometimes also called Life Plan Communities, offer all levels of residential options – from independent living to end of life care. Choosing a CCRC means that you can age successfully in a place where you can easily transition from one level of care to the next.
Calculating the cost of senior living
According to the most recent data available, a Place for Mom estimates that the average cost for independent living is $2,552 per month. This figure will vary based on location, with lower prices in the Southern U.S. and higher costs in New York,California and the Pacific Northwest. Freestanding apartment complexes for independent seniors may be cheaper, but there is a trade-off in quality and available service levels.
Genworth, a leader in long-term care (LTC) insurance, conducts an annual Cost of Care Survey for both assisted living and a long-term care. Their 2021 survey put the national median cost for assisted living at $4,500 per month. Long-term care is calculated at $9,000+ per month for a private room.
Moving into a CCRC is a bit different, as you pay an entrance fee to the community. Each CCRC has a different fee structure, but most offer all-inclusive contracts that take your future needs into consideration. You pay for peace of mind, knowing that you are covered for whatever comes next.
Paying for senior living costs
Moving to a senior living community is primarily funded by your retirement savings, proceeds from the sale of your current home, or a reverse mortgage. A long-term care insurance policy can also help depending on the coverage details. Medicare will not cover residential costs.
The best time to determine how you are going to pay for your lifestyle is before you make any decisions. It is always recommended that you consult with a financial advisor when considering any big moves.
If you don’t already have a professional that you work with, ask family or friends for a trusted recommendation. You can also do your own research. The National Association of Financial Advisors (NAPFA) is a comprehensive resource that describes what to look for, what to ask and what services are available in your area.
Lawrence Presbyterian Manor can also help you review your finances during the application process. Our sophisticated actuarial software calculates your projected costs as you move through the continuum of care offered here.
Getting to the bottomline
According to the U.S. Bureau of Labor Statistics, people aged 55 to 64 spent an average of $57,180 per year on housing, food, utilities, healthcare, and household upkeep. That’s $4,765 per month. Almost twice the median cost for independent living.
Cost is the big consideration, but here is a lot more to know and think about before making the move to a senior living community. Keep reading and researching. You’ll never regret learning too much.
Helpful Links
investopedia.com/the-cost-of-living-in-a-retirement-community-5069448
