5 Tips to Help Finance Assisted Living for a Senior Loved One

Are you starting to grapple with the idea that an aging parent needs to move to an assisted living community? While adult children often find ways to support a parent’s needs at home for a while, it’s not always possible to do so over the long term. Juggling caregiving with a career and your own children’s needs isn’t easy.

As adult children start the search for assisted living, one of the questions they ask most often is how much the monthly fees will be. Another is what payment methods are accepted. Some adult children are surprised to learn their parent’s Medicare won’t pay for assisted living costs, while others wonder if long-term care insurance might help pay for care other than a nursing home.

This information should help you better understand the costs associated with assisted living and the types of funding to explore.

Understanding the True Cost of Assisted Living

As you begin making visits to communities and comparing the costs, it’s important to know that every senior living provider has its own unique pricing structure. To make certain you understand each one, ask for a list of amenities and services included in the monthly fee and what additional expenses you are likely to incur.

Depending on the city and state you are searching in, you’ll find the costs can vary widely. According to a 2021 Genworth financial survey, the national median cost for assisted living is $4,500 per month. For older adults who want a large apartment or a community that offers a richer variety of amenities, the monthly fees can be much higher. The same holds true if the senior’s care needs are more extensive. Most communities assess level-of-care charges based on how much staff time is required.

The base fee for assisted living communities often includes:

• Caregivers on-site and available 24/7
• Choice of apartments and floor plans
• Registered dietician and/or chef who oversees meals
• Range of daily activities and outings to participate in

5 Programs to Finance Assisted Living

While most of the expenses associated with assisted living are usually paid for with private family resources, there are other options to explore. Here are a few to research before your senior loved one makes a decision:

• Long-term care insurance: If your parent purchased a long-term care insurance policy, review the policy to see what it covers. Adult children sometimes mistakenly assume long-term care insurance only pays for nursing homes. Many policies also cover home care services and assisted living communities if certain conditions are met. Call the broker for clarification if you have any questions.
• Benefits for veterans: Besides a veteran’s normal pension, additional funds to finance senior care expenses, known as the VA Aid and Attendance benefit, are available for those who qualify. You can visit the Pension Benefits section of the U.S. Department of Veterans Affairs website for more information. This benefit is available to veterans and surviving spouses who meet the criteria.
• Medicaid: Depending on the state you are searching for care in, there might be Medicaid money available. These are generally joint federal and state programs that are administered at the state level to help ensure low-income seniors have access to care. Check with your state’s department of aging for more information.
• Short-term bridge loans: For most older adults, a house is their greatest asset. Many need the proceeds from its sale to finance this transition. Some seniors want to make the move to assisted living soon, but wait to liquidate investments until the market is more favorable. In situations like these, a short-term bridge loan can help. These loans allow a senior to borrow against assets so they can move, and then pay back the loan after investments are sold.
• Life settlement funding: Some seniors have older life insurance policies they purchased for peace of mind when their children were young. Life settlement companies buy these policies from seniors for amounts greater than the cash surrender value but less than face value. The proceeds can be used to help finance assisted living. If you think this option might be a good fit for your parent, talk with their attorney or a trusted financial advisor for a referral to a life settlement company.

A final tip for family caregivers that isn’t related to finances: Be kind to yourself. Being responsible for the care of a loved one can be challenging. Asking for help is a necessity, not a luxury. Coping With the Stress of Caring for Aging Parents is a good article to read for advice on managing the stress of caregiving for your parent or other senior loved one.