Retirement living comes with big benefits, but many believe it also comes with a price tag so big they can’t afford it. In reality, retirement living may be well within reach for you or your loved one once you compare it to the true cost of living at home, and learn the funding options available to help offset the cost. Let’s take a look.

The Cost of Retirement Communities

Senior living is actually an umbrella term for a continuum of care. As such, the cost is closely tied to the level of care that you may need. Types of care on the continuum include:

Independent Living – This type of senior living is less about care and more about lifestyle because it’s designed for active seniors who need little daily assistance and want carefree living with a range of social opportunities. Although there is little published data on the average cost of independent living it is typically less than other types of senior living; ranging from $1,000 to $4,000 a month.

Assisted Living – Consider this the next step in the continuum with onsite care, 24-hour supervision and support with daily activities provided. Plus, you’ll still enjoy amenities and social opportunities similar to independent living. According to the most recent Genworth Cost of Care Survey, a private, one-bedroom apartment costs $4,000 per month on average.

Memory Care – Here you’ll find an environment specifically designed those with Alzheimer’s disease and dementia that includes 24/7 support, structured activities and specially-trained staff. There is also little published data on average costs for memory care because it varies so greatly, however costs typically ranges from $2,000 to $7,000 a month.

Skilled Nursing – This type of senior living is what you might consider the highest level of care on the continuum with 24/7 nursing as well as physical, speech and occupational therapists onsite. According to the most recent Genworth Cost of Care Survey, a semi-private room is $7,441 and a private room is $8,365 a month on average.

Senior Living versus Aging at Home

The price tag of senior living may give you a bit of sticker shock initially, yet when you look a little deeper into the value that’s included within those monthly numbers, in some cases it can be less than aging at home!

While you may be comparing the monthly cost of senior living to the cost of your mortgage or rent, keep in mind your total cost of living at home each month also includes food, entertainment and home upkeep. These costs are typically included in the monthly cost of senior living that you see above. In many cases, at least some utilities are included as well.

Not to mention extras like beautiful campuses, spacious accommodations and amenities such as a pool, fitness center, housekeeping and laundry services as well as a monthly calendar filled with clubs, classes, events and outings that you may not have access to at home. But what’s truly invaluable is the peace of mind that comes with knowing you’ll always have care and support, if and when you need it.

Funding Options for Retirement Living

As you prepare financially for retirement living, it’s important to understand the options available that may be able to help you offset the cost including:
Veterans Aid & Attendance Benefit – Wartime veterans or a surviving spouse may be eligible to receive a non-service connected pension (above the basic pension) to assist in paying for assisted living, home health care, adult day care or skilled nursing if you meet certain conditions.

Long-Term Care (LTC) Insurance – LTC insurance can help pay for the cost of home health care, adult day care, assisted living, memory care, skilled nursing and hospice by covering services typically not covered by health insurance, Medicare or Medicaid.

Life Insurance Conversion – You may be able to convert an in-force life insurance policy into a pre-funded financial account that disburses a monthly benefit to help pay for needs such as home health care, assisted living, skilled nursing and hospice.

Reverse Mortgage – In this type of home equity loan, homeowners 62 or older can access their equity to supplement retirement income. The lender will make payments to you based on a percentage of your accumulated equity.

Your Current Assets Can Also Help

Last, but certainly not least, look at the resources you may already have available. Consider selling or renting your home, for example. Do you have savings, stocks, bonds or annuities? What about income such as Social Security or a pension? Any or all of these can also help make retirement more affordable.

For additional help in getting financially prepared for retirement living, check out our Family Guide to Funding Senior Care & Housing today.