As baby boomers age and
continue to live longer, finding a place where they can age
safely, comfortably – and affordably – is becoming
more of an issue. In 2011, the average yearly cost
in the US for rent in an assisted living community was $41,724
While this may seem high, you
have to factor in the improved quality of life that assisted
living offers. Assisted living costs generally include
all basic living expenses such as rent, utilities and food as
well as 24-hour security services, housekeeping, health services,
lawn care, property taxes and insurance, trash removal, repairs
and maintenance, and the things people frequently forget to
include – social activities and entertainment. When you
factor in all that assisted living has to offer, it actually
is quite a bargain! However, many seniors and their families
struggle with how to pay for it.
While Medicaid does have assistance
programs that will help pay for certain levels of assisted living,
there's no rule that requires a state program to pay for assisted
living, and most states don't cover it. Those that do usually
cover only limited services. Medicare doesn't pay anything for
custodial (nonmedical) care in a nursing home or assisted living
So what options does
a person have when faced with the challenge of needing to finance
living in an assisted living community?
One of the best ways is to sell
the home of the person moving into assisted living. This can
help alleviate much of the burden. If you need some money to
tide you over until a home is sold – or you’re waiting
for other benefits to kick in – a senior living
line of credit can help. These offer low, interest-only
payments that you can use for paying monthly rent at an assisted
living community or other expenses.
If you’re trying to pay
for assisted living for a spouse while you’re still at
home, look into a reverse mortgage, which lets you convert some
of the equity in your home into cash. With a reverse
mortgage, you can get a monthly payment that can be
used for your spouse’s care expenses, while allowing you
to remain in your home.
If you have a life insurance
policy, look into the Life Care Assurance Benefit Program,
which allows a senior to use a life insurance policy to help
pay for long-term care and housing by converting a portion of
the policy death benefit into a long-term care benefit.
Another way to cut the cost of
assisted living is friendship living –
which simply amounts to sharing a living space with another
senior. Aside from the significant cost savings of having a
roommate, the ideal shared living arrangement can provide a
comfortable, nurturing and supportive environment for seniors
who are well matched.
If you’re a veteran,
you may qualify for the Aid
& Attendance Program and receive monthly benefits
to help cover the costs of assisted living care. It allows veterans
and surviving spouses who require the regular attendance of
another person to assist in day-today activities to receive
monetary compensation and care in an assisted living facility.
The best way to ensure you have
the funds to pay for assisted living is to plan ahead. One of
the best ways to do this is to get a long-term care
insurance policy – and it’s best to get
this while you’re still young, to reduce the cost of premiums.
You should also make sure that any policy includes assisted
living as one of the options for long-term care.
Finally, it’s good to know
that some assisted living expenses are tax deductible.
Generally, only the medical component of assisted living costs
is deductible and ordinary living costs like room and board
are not. But there are exceptions. For a taxpayer to be able
to deduct assisted living expenses, the individual must qualify
as being “chronically ill,” which means someone
• unable to perform two
or more “activities of daily living” (eating, bathing,
dressing, walking, going to the toilet) without assistance.
• in need constant supervision because of a “severe
cognitive impairment” such as Alzheimer’s disease
or related dementias.
The resident must have been certified
within the previous 12 months as chronically ill by a licensed
health care practitioner and all personal care services must
be provided pursuant to a plan of care prescribed by a licensed
health care practitioner. This means a doctor, nurse, or social
worker must prepare a plan that outlines the specific daily
services the resident will receive. Most assisted living communities
prepare care plans for their residents.
With the right planning and preparation,
assisted living is an affordable option for most people.
To learn more about these topics,
simply search the bolded items in your favorite
Mature Market Study
David has over 20 years’ experience as a writer and
editor. Senior issues have long been his passion, and in addition
to past experience writing about maintaining a healthy outlook
throughout every phase of life, he has volunteered his time
and skills to such organizations as Senior Services of King
County in Seattle. He is one of the many expert authors who
is currently writing on behalf of Emeritus
assisted living communities.