Talk to anyone who’s new to the world of caring for a senior—or anyone who hasn’t begun that journey yet—and you’ll run into a lot of common knowledge and received wisdom that’s, well, not quite accurate. Over and over, people who work in or write about the senior care industry run into assumptions that prevent families from getting the help they need. To help people get reliable information so they can help their families, we’re starting a ten-part blog series on Busting Senior-Care Myths. At the top of our myth list is the common notion that assisted living costs too much to be practical for people who can no longer live alone safely.
Assisted living costs vary from place to place
According to Genworth Financial’s 2016 national cost of care survey, the median monthly cost of assisted living in the US is $3,628. But that number may not reflect what communities near you or your parents charge—and those costs can vary widely from state to state and, within states, from one city or town to another. Here are a few examples
Median monthly assisted living costs for selected states, 2016:
- Alaska $5,750
- Alabama $2,900
- California $4,000
- Connecticut $4,950
- Florida $3,045
- Hawaii $4,125
- Kansas $3,863
- New York $4,136
- Oregon $4,065
- Texas $3,515
The District of Columbia’s median cost for assisted living in 2016 was a breathtaking $6,700 per month. Which leads us to the cost differences among cities within the same state. Alabama is a prime example. Assisted living in Dothan, a small city near the Florida Panhandle and Georgia state line, has a median cost of just $2,000 per month. In Mobile, on Alabama’s Gulf Coast, assisted living costs a median of $3,895 per month – nearly twice the cost of care in Dothan. Birmingham, the state’s largest city, has a median cost of $3,081.
You can use the Genworth tool and A Place for Mom’s interactive Senior Living Cost Index to compare assisted living costs in your parents’ area with costs near you or other family members. You may find that having your parents live closer to you has financial as well as family-time benefits.
Assisted living costs aren’t rising as fast as you think
As Ben Hanowell wrote at our sister site, A Place for Mom, assisted living costs aren’t going up year after year the way some other costs are. A Place for Mom reported that between 2012 and 2016, the median annual growth rate of costs for assisted living, memory care, and independent living was just “1.8%, or about $62 per year.” Genworth bases its projections for the future cost of care on an assumed 3% yearly rate of inflation.
But some other costs that affect seniors and their families are rising, too. Take rent for example. The national median rental rate rose by more than 8% from 2012 to 2015 – not good news for apartment dwellers. Although food prices vary from season to season, overall they are rising, too. From 2012 to 2016, the cost of food items in the US consumer price index rose by 6.1%. Depending on assisted living, housing, and grocery rates where you live, assisted living may cost less now (or in the near future) than renting a home and buying all of your own food.
Assisted living can cost less than full-time in-home care
While in-home care is a bargain compared to the cost of nursing home care, the cost of full-time in-home assistance can add up quickly. In some parts of the US, 40 hours a week of in-home care costs more than the total monthly rate for assisted living, and round-the-clock in-home care can cost considerably more. In California, for example, the median cost of a full-time in-home health aide is $4,576 per month – more than $700 more than the median cost of assisted living. That’s about the same cost difference as Florida, where assisted living costs a median of $3,045 and in-home health assistance costs $3,766. That cost difference doesn’t factor in other expenses that go along with renting an apartment or maintaining a home.
Assisted living may cost less than ongoing home expenses
For renters, the cost of in-home care plus rent, insurance, utilities, and groceries can be far higher than the cost of assisted living. That’s also true for homeowners who are still paying off their mortgage. But even for people who own their homes outright, there are other ongoing costs that can make aging in place an expensive proposition. Property taxes, insurance, and utilities can cost several thousand dollars per year. And as homes age, they need the occasional big repair to stay livable. A new roof, foundation repairs, or new heating and cooling units can easily cost $10,000 or more. If your parents’ home is older and in need of major work, assisted living may be a more practical, safer, and less costly option.
Assisted living can make family finances more secure
Most advice to adult children of parents who need care focuses on self-care for the stress that caregivers experience. But family caregivers also face huge financial challenges that don’t get talked about as often. Many times, working-age adults—some with children still at home—move a parent in with them to save money on senior care. It seems like the most practical and thrifty solution, but research has shown that over time, this approach to caregiving sometimes makes the family’s financial situation worse.
That’s because many family caregivers, especially working women, end up cutting back or quitting their jobs to take care of their parents. The Atlantic reported a study of women who did just that, which found that they lost an average of $324,000 over the years they were out of the workforce. By the time family caregivers are free to return to work, they face age discrimination and the challenge of getting hired with out-of-date skills and a resume gap. As Liz O’Donnell wrote in The Atlantic, “How will they afford their own care later in life if they can’t save for it at midlife while they are caring for someone else?” Assisted living can help seniors live safely and sociably while preserving financial stability for their children and grandchildren.
There are many ways to pay for assisted living
Assisted living is often a better bargain for everyone than in-home care or family caregiving, but it can be hard to see past the monthly rate. Fortunately, there are many ways to pay for assisted living. Seniors with long-term care insurance are usually covered for the amount of time set forth in their policy. Older adults who hold a whole-life insurance policy may be able to use the cash value (minus taxes) to pay for assisted living. Homeowners can sell or rent their house, take out a reverse mortgage, or apply for a bridge loan to move into assisted living. Seniors with few assets besides a house and car may be eligible for their state’s Medicaid program. And veterans and their spouses and widows may be eligible for a monthly Aid & Attendance pension benefit from the VA to cover the cost of assisted living.
This post goes into more detail about different ways to pay for assisted living. And you can always call SeniorAdvisor.com’s trained advisors at 1-800-805-3621 to discuss care options and costs in your area.