Budgeting for elderly care and the costs of senior living facilities are as varied as seniors themselves. We will take a look at the things you need to consider when determining what you can afford and how to pay for it.
Most people hope and plan to live independently in their own home for the rest of their lives, but at some point, you or someone in your family will likely need some form of assisted living. Determining what it will cost can be confusing and daunting. Following are some factors to consider.
Factors that Determine Cost
Senior residences have a variety in settings, styles, care levels, and amenities. The cost also varies based on geographic location, just like other real estate and the overall cost of living do. Senior living in Atlanta, Ga. can be less expensive than in many other parts of the country.
The type of residence is also a factor. An apartment will generally cost less than a townhouse or standalone home. Determine how much room you need, and if you are comfortable living close to your neighbors.
Services and care levels are a big cost factor as well. If you can live independently, you will pay less than if you use services like housekeeping or laundry, and if you need daily assistance or medical care. Oaks offers four tiers of assisted living in Cumming, Ga. and at our other facilities. We also offer memory care by Atlanta specialists.
Types of Costs
The majority of assisted living communities use a tiered pricing model with bundled services, while others charge on a fee-for-service basis. Generally, residents are billed monthly. Therefore, it is necessary to determine what you can afford to pay each month.
Most assisted living residences charge on a month-to-month lease arrangement, but a few require long-term contracts. Generally, the entrance fee will be the largest portion of the cost. Find out if there are refund options. Also find out what is covered in the monthly fees, and at what rate they generally increase each year.
Budgeting for Elderly Care Costs
According to research compiled by several non-profit senior living organizations, including the Assisted Living Federation of America (ALFA), the average cost for a private one-bedroom apartment in an assisted living residence is $3,022 per month. However, assisted living is often less expensive than having home health or nursing home care.
ALFA has a helpful Guide to Choosing an Assisted Living Residence which provides a wealth of information that can help you determine what you can afford, and ensure that you ask the right questions to avoid any unforeseen costs. It also includes a list of documents to get and review before signing anything.
Typically, people sell their home before they move into a senior living facility. The proceeds of the sale will go a long way in paying for your senior living care. Some people choose to rent their home out, and use the rental income to help fund their new residence. Another possible option is a reverse annuity mortgage, which allows seniors to use the value of their own home to pay for their care. Many seniors are happy to give up the responsibility of caring for their home. As the real estate market starts to rebound, this is becoming a more viable option that it has been in recent years
In addition to the proceeds from the sale or rental of your home and your savings, be sure to factor in your other sources of income, including Social Security, veteran’s benefits, pension plans, as well as interest and dividends from investments.
Other Sources for Funding Senior Care
If you have a long-term care insurance policy, you may be able to stay in your current home and get the care you need. Depending on your financial situation and veteran status, you may qualify for government subsidies for senior housing. However, like all government programs, their funding is subject to the will of state and federal elected officials, so there is no guarantee that they will always be available.
Seniors with annual incomes under $12,000 may qualify for the Department of Housing and Urban Development’s Section 8 senior housing, which provides subsidies that help pay for the room-and-board portion of both independent and assisted living communities. For details, click here.
The Department of Veterans Affairs also provides care to veterans in its residences, but space availability can be an issue. More information is available at here.
Medicaid, which provides federal healthcare assistance to low-income Americans, covers some assisted living services in many states. However, eligibility requirements, and coverage amounts vary widely. Check with the agency that administers Medicaid benefits in your state for details.
Lastly, make sure to view our resources for additional information to help in your decision process. You may also contact one of our helpful care professionals directly to assist in helping you estimate the costs and payments for elder care