There are various factors that go into how much a senior could spend on assisted living facilities; the size of the facility, the types of services they offer, and the amount of services a senior personally requires. Assisted living facilities offer solutions for many families that cannot give the needed level of care to seniors they would otherwise not get at home. With the consistent demand for these facilities, comes continuously rising costs.
Spurred by the continuing shortage of skilled labor in senior living, and exacerbated by Covid-19, the costs to reside in assisted living in 2020 are significantly higher than the previous year, according to the latest Cost of Care Survey from insurer Genworth Financial. Assisted living costs rose 6.15%, the highest spike among all care segments. The increase from 2018 to 2019, by comparison, was only 1.28%. The five-year compound annual growth rate for assisted living costs rose to 3.62%, according to the survey. The median cost for assisted living in the United States is about $4,300 per month, or $51,600 annually.
Over 800,000 Americans are residing in assisted living facilities, with just over half of residents being 85+ years old. The importance of assistant living facilities is still very relevant. In a senior living community, you start with upfront costs. Assisted living communities and independent living communities generally have a monthly cost that could range from $2,000 to $7,000, and may make certain hospitality and care services available for an additional monthly fee. Many facilities will cater their prices to ensure all the needs of particular patients are covered.
The secret to getting your money’s worth in choosing assisted living facilities is in knowing the factors in assisted living costs, because the price structures of these are dependent on the level of care that a resident requires.
Now rises the question: how will you afford it?
Paying with Life Savings
A unfortunate, yet common, option that many seniors resort to is having to spend their life savings on their assisted living facility fees. Paying out of pocket can be an option for those who have significant retirement savings, however, in most cases, this is not the option for everyone. Your savings will likely run out much quicker than expected, so more often than not, seniors will have to look elsewhere to fund their assisted living expenses.
Selling a Home
In some situations, seniors who are moving into an assisted living community will no longer be able to live at home. Downsizing like this can provide an opportunity for older adults to use the funds from the sale of their home to cover the cost of assisted living community care. However, many families prefer to keep their homes within the family. Having to sell their home would mean the senior would not have the opportunity to pass it down to their children or grandchildren.
Selling a Life Insurance Policy
A senior’s life insurance policy is often their largest asset, and one that they could use to their advantage in situations like these. Choosing a reputable life settlement company, like Abacus Life, can open the door to a large lump-sum of cash to use to fund assisted living costs. More often than not, there comes a point in a senior’s life where their life insurance policy can become more of a burden than an asset. Maintaining expensive premiums can be a costly expense over time. Selling your policy for immediate cash can help alleviate the financial strain of assisted living costs, freeing up your savings and other assets to utilize in ways that are more enjoyable for you and your family.
Sources: SeniorLiving.org | Senior Housing News