The Cost of Senior Living: Understanding and Comparing Your Options

Oct 27, 2023

Fact Checked

Edited by: Donya Currie, MA, Senior Editor at NCOA

Reviewed by: Kathleen Cameron, BSPharm, MPH, BSPharm, MPH, Senior Director, NCOA Center for Healthy Aging

Key Takeaways

The cost of senior living varies widely according to location and the level of services provided. In general, the more care you need, the more you will pay.
In most senior living communities, all-inclusive rents include some kind of meal plan with an option to participate in communal meals. Planned social activities, such as interactive games, walking groups, and movie nights, are also included.
Residents of senior living communities pay with a variety of methods, including personal savings, long-term care insurance, and government assistance programs like Medicaid if they qualify. Medicare won’t cover any form of senior living, though it may cover services received by senior living residents.

The cost of senior living communities is a big concern for older adults as they near retirement. After all, you can’t budget for retirement if you don’t know the dollar amount of your two biggest expenses: housing and health care.

Some senior living communities, like assisted living and nursing homes, combine housing and health care fees into a single monthly fee. Other options, like independent living, offer room, board, and a social lifestyle, but no health care services. Knowing what services are covered by a senior living community’s monthly fees is the first step in budgeting for your future.

The Local Care Reviews Team created this clear, comprehensive guide to the costs associated with senior living communities, including what is covered by your monthly fees. We want you to feel more informed about how to pay for housing and long-term care as you age.

Why you can trust us

Our Local Care Reviews Team works hard to provide clear, transparent information to older adults and their caregivers seeking senior living and home care. To provide you with the best possible information, we have spent more than 1,000 hours:

Consulting with our advisory board, which consists of a certified care manager, a board-certified geropyschologist, and a geriatric nurse practitioner
Analyzing and synthesizing state-specific data from government health regulatory agencies Surveying 1,000 older adults and their caregivers about their search for senior living and home care options
Conducting a focus group with caregivers working to help older adults find local care
Mystery shopping dozens of brands and communities associated with long-term care for older adults
Analyzing and synthesizing nationwide data from the Centers for Medicare & Medicaid Services, the Administration for Community Living, and Genworth

Cost of senior living: The big picture

People are retiring later in life. According to Gallup, the average retirement age in 1991 was 57, compared to 61 in 2022. ^[1] Among non-retirees, the expected age of retirement rose from 60 in 1995 to 66 in 2022. An older age of retirement, combined with the nation’s growing inflation rate, suggests Americans are having a harder time saving for retirement. According to the Federal Reserve, less than half of adults 60 and older report having their retirement savings on track. ^[2]

Given this financial landscape, many older adults are concerned about where they will live as they age and how they will pay for it. Older adults with health concerns may feel especially vulnerable. According to the Administration for Community Living, a person turning 65 in 2020 had an almost 70% chance of needing some form of long-term care in their remaining years. ^[3] It can be overwhelming to think about the cost of senior living, especially for older adults who are living on a limited income. But the more you plan ahead for yourself or someone you care for, the more options you will have.

The cost of senior living communities by type

Senior living communities vary widely by type, cost, services, and amenities. It makes sense to decide where you’ll live based on your health care needs. Active older adults with few health concerns may choose to age in place in their homes. Other healthy older adults may thrive in independent living communities, while those living with dementia or other chronic diseases may be safer and happier in communities providing attentive, daily care, such as assisted living or nursing homes.

1. Independent living

Independent living communities are condo-style buildings with amenities specifically designed to serve the needs of older adults. They typically consist of one large building or several buildings on one campus, with a communal dining room, gathering areas for social activities, and a combination of studio, one-bedroom, and two- or three-bedroom apartments.

The cost of senior independent living

If you’ve been searching “what is the average cost of senior independent living,” you’ve probably discovered that it’s hard to find a clear answer. Independent living monthly fees vary widely based on your location and the amenities available in each location. Brookdale, the largest operator of senior living in the country, reported a range of $1,650–$16,165 per month for independent living rents, with the most affordable rents in the southeast United States and most expensive in the Northeast. ^[4] In most cases, independent living communities are not transparent about costs online or over the phone. To get a more specific idea of independent living costs, you may have to visit a community in your area and sit down with a sales manager.

Some independent living communities ask for an entrance fee or security deposit, which may or may not be refundable. These fees will vary by community.

What is and isn’t included in independent living costs?

All-inclusive rents in independent living communities usually cover the cost of your apartment plus light housekeeping, planned social activities, and a meal plan. Sometimes, transportation and other amenities are included in the rent. Personal care services, such as help with activities of daily living (ADLs), are not provided by independent living communities, nor are medical services. It is possible for residents of independent living communities to receive such services in their own apartments, but only by contracting with third-party providers.

2. Low-income senior housing

Because many older adults live on fixed incomes, managing health care and other costs on top of paying rent or a mortgage can be challenging. Qualifying adults 62 and older can find subsidized senior apartments through the U.S. Department of Housing and Urban Development (HUD). The HUD Section 8 Housing Choice Voucher Program helps older adults, people with disabilities, and families with low income find affordable housing.

The cost of low-income senior living

Older adults living in HUD housing pay 30% of their adjusted gross income. ^[5] So, if you make $1,500 per month, your monthly rent would be $450. Unfortunately, HUD housing for older adults often has a long waiting list, although availability will differ based on where you live. Use HUD’s affordable rents tool to find subsidized senior housing near you.

What is and isn’t included in low-income senior housing costs?

Low-income federal housing for older adults does not include housekeeping and personal care services, but these communities provide residents with a sense of fellowship, shared gathering spaces, community programs, and access to social services. Residents in low-income housing who need medical care or personal care assistance may need to apply for Medicaid in order to receive additional services.

3. Assisted living

Assisted living communities provide many of the same services as independent living, such as social activities and communal meals. The primary difference between independent living and assisted living is the addition of personal care services, such as help with activities of daily living like bathing and dressing. For example, the National Center for Assisted Living (NCAL) reported that 64% of assisted living residents need help bathing. ^[6] Assisted living also offers medication administration and some medical services, though facilities are not required to have a registered nurse (RN) on staff.

The cost of assisted living

The median monthly cost of assisted living in the United States is $4,500, as reported by a Genworth 2021 Cost of Care Survey. Monthly rents vary widely by location. For example, California’s median monthly cost of assisted living is $5,250. In Florida, assisted living costs about $4,000 per month. ^[7]

Many assisted living facilities also charge an initial, non-refundable community fee. This fee varies by community. An assisted living community we researched in Columbus, Ohio, charged $1,500 for its community fee. A similar independent living option in Greenville, South Carolina, asked for a $2,500 fee.

What is and isn’t included in assisted living costs?

The base fee cited by most assisted living facilities typically covers housing and several other services, like housekeeping, meal plans, 24/7 emergency response, and planned social activities. In some cases, it may include transportation to doctor’s appointments. The cited fee typically does not include fees for personal care services, like medication administration and help with ADLs. Fees for these services can increase the monthly cost of assisted living by hundreds or thousands of dollars. When touring assisted living facilities, be sure to ask what is and is not covered by the base fee.

4. Nursing homes

A nursing home, sometimes referred to as a skilled nursing facility or just skilled nursing, is a residence for adults needing ongoing, skilled care that can no longer be provided at home or in an assisted living community. Nursing homes offer both long-term residential care and short-term rehabilitative care. Many nursing homes also offer respite care, or temporary care for people living in other settings, to give their usual caregiver a break from caregiving responsibilities.

The cost of nursing homes

The monthly median cost for a nursing home in the United States is $7,908 for a shared room and $9,034 for a private room. ^[7] This is not a manageable out-of-pocket expense for many Americans. Fortunately, the government offers more funding options for nursing home care than for other types of senior living.

What is and isn’t included in nursing home costs?

A nursing home offers the highest level of care available to older adults outside of a hospital. Services typically included in a nursing home’s monthly fees are medication administration, help with most or all ADLs, and skilled medical services provided by an RN or a licensed professional nurse (LPN) supervised by an RN. Nursing home care also includes communal meals and planned social activities.

5. Memory care

For older adults living with Alzheimer’s or another form of dementia, memory care offers a secure residential setting with locked entrances and exits to prevent residents from wandering. Some stand-alone memory care facilities exist, but many memory care communities are located within assisted living or nursing home facilities. In this case, they are often referred to as special care units.

The cost of memory care

Dementia Care Central reported an average monthly cost of $6,160 for memory care in an assisted living community, which comes out to $73,920 annually. ^[8] As dementia progresses, a person living with dementia in a memory care unit may need to transfer to a nursing home.

What is and isn’t included in memory care costs?

If memory care is located within an assisted living community, the base monthly fee will cover room, meals, social activities, 24/7 emergency assistance, and some personal care services, including medication administration and help with bathing and dressing. If a memory care unit is located within a nursing home, the all-inclusive monthly fee covers social activities, meals, and any medical or personal care service needs the resident has, except those requiring hospitalization.

6. In-home care

For adults choosing to age in place , it is possible to receive supportive services in the home. In-home care, or home care, is often used as a catch-all term for a variety of services. The most common types of in-home care include:

Companion care or homemaker services: Provided by non-certified, non-licensed professionals, these services include companionship, running errands, and helping with household tasks like laundry and meal preparation.
Personal care services: Typically provided by non-licensed, non-certified professionals or certified nursing assistants (CNAs), personal care services include medication management and administration and assistance with ADLs.
Home health care services: Provided by RNs and LPNs, home health care services include skilled nursing services, such as catheter care, wound care, and injections.

The cost of in-home care

The Cost of Care Survey reported a median monthly cost of $4,506 for 40 hours per week of homemaker services, or companion care. The median monthly cost for 40 hours per week of home health aide services is $4,680. ^[7] But not everyone choosing in-home care will need 40 hours per week of support. Some older adults living at home may only need companion care for a few hours each week, while others require around-the-clock help with ADLs.

What is and isn’t included in the cost of in-home care?

The cost of companion care or homemaker services does not include any personal care or medical services. To receive skilled nursing care in your home, you will need to work with a home health agency or with individual RNs or LPNs to contract for services. In most cases, RNs and LPNs will exclusively provide skilled nursing services and will not provide assistance with ADLs or homemaker services.

When budgeting for home care versus a senior living community, it’s important to factor in the cost of utilities, home maintenance fees, and your monthly rent or mortgage payment.

7. Continuing care retirement communities

A continuing care retirement community (CCRC), also referred to as a life care community (LCC), provides independent living, assisted living, and skilled nursing in a single location. Many CCRCs also provide memory care. Residents of CCRCs can move from one level of care to another as their needs change.

The cost of CCRCs

CCRCs provide a wide range of care in a single setting. They also typically offer resort-style amenities, such as restaurant-style dining venues, libraries, bars, fitness centers, and attractive outdoor spaces. For these reasons, CCRCs tend to be more expensive than other forms of senior living communities. In addition to the monthly fees, residents of CCRCs must pay an entry fee before joining the community. These fees can range from $50,000–$450,000 or more, according to the Internal Revenue Service. ^[9]

What is and isn’t included in the cost of CCRCs?

According to Alia Granger, Senior Marketing Associate at a CCRC in Durham, North Carolina, fees for services will vary depending on the type of contract the community has for long-term care. “In a type-A community,” she said, “you pay more at the beginning, but if you move through the continuum of care, your monthly fees don’t change … In a type-C community, it’s a fee-for-service model. You don’t pay for it unless you use it, but if you use it, you pay full price.”

At the independent living level of a CCRC, services will also vary by community. Some CCRCs will have all-inclusive monthly fees, including housekeeping, meal plans, activities, emergency response, and more. Other communities are more a la carte in their approach, so residents only pay for the services they want.

How do I pay for senior living?

Senior living and long-term care are expensive. The more you plan ahead, the more options you will have. However, not everyone is able to plan, and setbacks like health issues and layoffs can derail retirement savings.

Creative financing, such as drawing from home equity and life insurance policies, can help cover the cost of senior living. For qualifying older adults with limited incomes and United States military veterans, government assistance programs can help. Use BenefitsCheckUp® to explore what programs you might qualify for.

Table 1 Methods for paying for senior living communities

Payment method	How it works	Where you can use it
Private pay	You can pay for senior living using personal savings, including Social Security benefits, 401(k) or IRA accounts, pension payments, or stocks.	All forms of senior housing accept private-pay residents.
Long-term care insurance	You can be reimbursed for long-term care through your long-term care insurance, but know the details of your policy. Some have an elimination period during which beneficiaries have to pay out-of-pocket for services.	Long-term care includes in-home care, assisted living, memory care, and nursing homes. Long-term care insurance can’t be used for independent living communities.
Life insurance benefits and conversions	You can use life settlements or accelerated death benefits to help pay for long-term care, but you often will not receive the benefit’s full cash value. ^[10] Work with a trusted financial advisor before making this kind of decision.	You can use funds from life settlements or accelerated death benefits as payment for any form of senior living.
Home equity and reverse mortgage	You can use the equity in your home to help pay for senior living, either through proceeds from the sale of your home or a reverse mortgage, which allows homeowners to use their own home as security for the loan.	Cash received from equity in your home can be used toward any form of senior living. But sometimes older homeowners are targeted in reverse mortgage scams. ^[11] Always work with a trusted financial advisor before making this kind of decision.
Medicare	Besides limited home health care, Medicare does not pay for any form of long-term care, but it may pay for services or goods received in a long-term care setting.	Medicare can be used to pay for up to 100 days in a nursing home following a qualifying inpatient stay in the hospital. Long-term care residents can rely on Medicare for some goods and services, such as physical therapy and durable medical equipment (DME).
Medicaid	For older adults meeting income qualifications, Medicaid can help pay for long-term care.	Medicaid is the primary payer for nursing home residents in the United States. ^[12] With the help of Medicaid 1915(c) Home & Community-Based Services (HCBS) waivers, some Medicaid beneficiaries can also receive help for assisted living, memory care, and in-home care. ^[13]
Veterans benefits	U.S. veterans and their spouses may qualify for Aid and Attendance benefits, which help to reduce the cost of long-term care. ^[14] State Veterans Homes also provide long-term care. ^[15]	Veterans benefits can be used toward assisted living, memory care, nursing homes, and in-home care.

Bottom line: Choosing a senior living community you can afford

It’s getting more challenging for older adults to save for retirement, and most Americans will need some form of supportive care as they age. The earlier you start thinking about where you want to live as you age, the more options you will have.

The cost of senior living will vary widely based on your location, the amount of care you need, and the type of amenities offered by each community. Some senior living communities, like independent living and CCRCs, are private-pay only. Long-term care communities such as assisted living, memory care, and nursing homes often accept Medicaid to help eligible older adults cover the cost of care. Medicare can also be used to help pay for some goods and services received by long-term care residents.

Begin your journey toward the right senior living community by talking with friends and family members. Trusted professionals, like physicians and financial advisors, can also help you understand the level of care you’ll need and how much money you have to pay for it.

Frequently asked questions

Older adults meeting income eligibility requirements can use Medicaid to pay for long-term residential care and other services they need as they age. U.S. military veterans can also receive government assistance as they age.

The cost of senior living in the United States varies widely based on location, the level of care a person needs, and the types of amenities offered by the community. Genworth reported the median monthly cost for assisted living in America at $4,500, with nursing homes starting at nearly $8,000 per month.

Have questions about this article? Email us at reviewsteam@ncoa.org.

Sources

Gallup. More in U.S. Say Inflation Is Causing Financial Hardship. May 2023. Found on the internet at https://news.gallup.com/poll/394943/retiring-planning-retire-later.aspx
Board of Governors of the Federal Reserve System. Economic Well-Being of U.S. Households in 2020 – May 2021. Found on the internet at https://www.federalreserve.gov/publications/2021-economic-well-being-of-us-households-in-2020-retirement.htm
Administration for Community Living. How Much Care Will You Need? Found on the internet at https://acl.gov/ltc/basic-needs/how-much-care-will-you-need
Brookdale Senior Living. How Much Does Independent Living Cost? Found on the internet at https://www.brookdale.com/en/our-services/independent-living/independent-living-costs.html
U.S. Department of Housing and Urban Development. HUD’s Public Housing Program. Found on the internet at https://www.hud.gov/topics/rental_assistance/phprog
American Health Care Association / National Center for Assisted Living. Facts & Figures. Found on the internet at https://www.ahcancal.org/Assisted-Living/Facts-and-Figures/Pages/default.aspx
Genworth. Cost of Care Survey. Found on the internet at https://www.genworth.com/aging-and-you/finances/cost-of-care
Dementia Care Central. Alzheimer’s/Dementia Care Costs: Home Care, Adult Day Care, Assisted Living & Nursing Homes. Updated February 2023. Found on the internet at https://www.dementiacarecentral.com/assisted-living-home-care-costs/
Internal Revenue Service. Elderly Housing Report. Found on the internet at https://www.irs.gov/pub/irs-tege/eotopicg04.pdf
Administration for Community Living. Using Life Insurance to Pay for Long-term Care. Found on the internet at https://acl.gov/ltc/costs-and-who-pays/who-pays-long-term-care/using-life-insurance-to-pay-for-long-term-care
Consumer Financial Protection Bureau. Avoid reverse mortgage shopping scams. Found on the internet at https://www.consumerfinance.gov/about-us/blog/avoid-reverse-mortgage-shopping-scams/
Medicaid and CHIP Payment and Access Commission (MACPAC). Estimates of Medicaid Nursing Facility Payments Relative to Costs. Found on the internet at https://www.macpac.gov/wp-content/uploads/2023/01/Estimates-of-Medicaid-Nursing-Facility-Payments-Relative-to-Costs-1-6-23.pdf
Medicaid.gov. Home & Community-Based Services 1915(c). Found on the internet at https://www.medicaid.gov/medicaid/home-community-based-services/home-community-based-services-authorities/home-community-based-services-1915c/index.html
U.S. Department of Veterans Affairs. VA Aid and Attendance benefits and Housebound allowance. Found on the internet at https://www.va.gov/pension/aid-attendance-housebound/
U.S. Department of Veterans Affairs. Geriatrics and Extended Care. Found on the internet at https://www.va.gov/geriatrics/pages/State_Veterans_Homes.asp

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