Assisted living and home care costs

Life is full of transitions, some easier than others: growing up, having kids, changing jobs, watching your kids move away, losing a parent. One of the more formidable transitions you may need to make is employing extra help in old age. While it can be difficult to give up some independence in this stage of life, you can ease this transition by preparing for the costs associated with assisted living sooner than later.

Care and cost go hand-in-hand

The more assistance you may require, the more it will generally cost. Keep this critical fact in mind as you plan for your eldercare needs. Assistance options may include:

• Home care: Home maker services are for those that need a little help around the house with things like cooking or cleaning. Home health aids can assist with basic household chores as well as personal care such as bathing and dressing.
• Assisted living facilities: These are residential facilities that offer personal care services, such as meals, housekeeping, and entertainment, along with varying levels of assistance with daily activities. Most facilities provide basic health services like nutrition counseling, physical or occupational therapy, and access to a pharmacy. Some of these facilities will offer special areas for those with Alzheimer's or other related health concerns in an area called "memory care."
• Nursing homes: These facilities are for people who may need the kind of round-the-clock care and supervision not generally offered in assisted living facilities.
• Continuing care retirement community (CCRC): These types of facilities offer independent living, assisted living, and skilled nursing facilities. This may be an option for people that want to stay in one place as their needs change. CCRCs can be an option for spouses who need different levels of care and want to stay together. However, these are generally the most expensive of all of the assisted living options.
   

What does it cost?

The cost of care varies widely based on the level of service that you are looking for, by state, and by individual facility. For 2021, the average cost for homecare is $4,500 a month. Assisted living is $5,200 a month. Nursing home care in a semi-private room is $7,900 a month¹. That comes out to a range of $54,000 to $94,800 per year.

Where could the money come from?

• While Medicare and supplemental health insurance may cover most of your medical services, assisted living and nursing homes are not covered.
• Medicaid may help for some individuals with limited assets in some care settings. Rules vary by state.
• Former service members may be able to get assistant through the Aid and Attendance benefit (contact your local Department of Veterans Affairs office for more information or visit the VA page on assisted living).
• Long-term care policy, riders on life insurance policies, or life settlements.
• Proceeds of a home sale, or a reverse mortgage.
• Personal savings, social security payments, pension/retirement account distributions, and/or annuity payments.

As you and your financial professional plan for these costs, you may want to consider these questions:

• Should you liquidate assets, such as selling your house?
• What are your income alternatives?
• Do you qualify for any government or veteran’s benefits?
• Does your estate plan account for end-of-life expenses?
• Does your cash value life insurance policy have a critical illness rider?
• Do you have long-term care insurance?
   

Plan now, enjoy the benefits later

The sooner you prepare for the possibility of assisted living, the better. Discuss the issues now with your family and loved ones – it can help make the transition easier for everyone when the time comes. Throughout the planning process, you can work with your financial professional to get the assistance and guidance you need.

For more information about resources in your area, visit the National Association of Area Agencies on Aging.

1. American Association for Long-Term Care Insurance, 2021