Assisted living is a crucial topic for seniors and their families as they navigate the challenges of aging.
While assisted living communities provide essential care and support, the cost of these services can be a significant concern for many.
Families often find themselves overwhelmed when trying to figure out how to fund assisted living for their loved ones.
Today, we’ll explore the various funding options available and help readers make informed decisions about how to pay for assisted living.
Our promise is to love and care for your family as we do our own.
Paying for assisted living: personal finance options to consider
One of the first places to look when funding assisted living is personal savings and assets, such as:
- Retirement accounts, such as 401(k)s or IRAs
- Investment income from stocks, bonds, or mutual funds
It’s important to consider the long-term impact of using these resources and work with a financial advisor to develop a sustainable plan.
Another option is to sell assets, such as real estate or stocks, to generate funds for assisted living. This can be difficult, as it may involve letting go of cherished possessions or investments.
However, it’s important to weigh the benefits of using these assets to ensure a loved one receives the necessary care and support.
Insurance solutions for assisted living costs
When it comes to funding assisted living, insurance can play a valuable role in covering the costs.
Two primary types of insurance that can help include:
- Long-term care insurance
- Life insurance conversions
While these options may not cover all expenses, they can provide significant financial support and help reduce the burden on personal savings and assets.
Long-term care insurance
Long-term care insurance is designed to cover extended care costs, including assisted living.
These policies can vary widely in coverage and premiums, so it’s essential to carefully assess different options.
Key factors to consider include:
- The daily benefit amount
- The length of coverage
- Any exclusions or limitations
Life insurance conversions
Some life insurance policies can be converted into a funding source for assisted living.
Life settlements allow policyholders to sell their policy to a third party for a lump sum, which can then be used to pay for care.
Alternatively, some policies have accelerated death benefit programs that allow the policyholder to access a portion of the death benefit while still alive to cover long-term care expenses.
Veteran benefit options for assisted living
Veterans and their surviving spouses may be eligible for benefits through the Department of Veterans Affairs (VA) to help cover assisted living costs.
Aid and Attendance pension for senior veterans
The primary benefit is the Aid and Attendance pension, which provides additional monthly income for veterans who require assistance with daily living activities.
To be eligible, veterans must meet certain service and disability requirements.
The application process can be complex, so it’s important to work with a VA-accredited representative or elder law attorney.
Community Residential Care
The VA’s Community Residential Care program also provides housing and supportive services in approved communities.
Some states also have veterans’ homes that offer assisted living and skilled nursing care at subsidized rates for eligible veterans.
Creative financing solutions for assisted living
Sometimes, seniors and their families may need to turn to creative financing solutions when figuring out how to pay for assisted living.
Two such options include
- Reverse mortgages
- Annuities
These solutions can provide a significant source of funds. However, consider the long-term implications and consult with financial advisors to ensure they align with your financial goals and estate planning.
Reverse mortgages
For senior homeowners, a reverse mortgage is a way to access home equity to pay for assisted living without selling the property. Homeowners can live in assisted living for up to 12 months before the reverse mortgage becomes due.
With a reverse mortgage, the homeowner receives a lump sum or monthly payments based on the home’s value. The loan doesn’t need to be repaid until the homeowner sells the property, moves out permanently, or passes away.
Annuities
Annuities are financial products that can provide a steady stream of income to help cover ongoing assisted living expenses.
An annuity involves the purchaser paying a lump sum to an insurance company, which in return provides regular payments for a specified period or the lifetime of the purchaser.
There are various types of annuities, each with different features and benefits, so it’s important to consult with a financial advisor to determine if this option is appropriate.
Evaluating the true cost of assisted living vs. home care
When considering assisted living, it’s important to evaluate the cost compared to other options, such as home care.
While assisted living can seem expensive, it’s important to factor in all the expenses associated with you or your loved one remaining at home, including:
- Rent or mortgage payments
- Utilities
- Home maintenance
- Groceries
- The cost of in-home care services
- The time cost for a family caregiver
In many cases, assisted living can be more cost-effective, especially considering the comprehensive services and amenities provided for seniors.
Quality of life and care considerations
Beyond the financial considerations, it’s important to think about the impact on the quality of life of your loved one and the level of care they need.
Assisted living communities typically offer a supportive environment with social opportunities, engaging activities, and around-the-clock care.
For seniors who require more assistance or supervision than can be safely provided at home, assisted living can offer peace of mind and a higher quality of life.
If you’re researching for a loved one, be sure to complete your due diligence and find a community that can accommodate your loved one’s care needs even as they progress.
Some assisted living communities, such as Kensington Senior Living, also offer comprehensive memory care services. If your loved one has dementia, Alzheimer’s, or another cognitive condition, our professional care team will be able to provide.
Choose Kensington Senior Living for your assisted living needs
At Kensington Senior Living, we’re dedicated to helping seniors and their families find the perfect care options. We offer independent living, assisted living, and three memory care neighborhoods.
We have seven (soon-to-be-eight) conveniently located communities that await your call:
- Kensington Place Redwood City
- The Kensington Redondo Beach
- The Kensington Sierra Madre
- Kensington Park (Kensington, MD)
- The Kensington Bethesda (Opening Summer 2025)
- The Kensington White Plains
- The Kensington Falls Church
- The Kensington Reston
The professional and compassionate teams at any of our locations can offer first-hand guidance and advice on assisted living financial planning.
Our goal is always to provide as much information as possible, in the most caring way, to our residents, their families, and potential residents.
Contact Kensington Senior Living today to learn more about our assisted living services, financial planning, and how we can support your family during this important decision.