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Budgeting for Senior Living

One thing that you realize as you get older is that having a plan makes reaching your goals easier. So as you start to think about budgeting for senior living and visualizing how you want to spend your later years, having the details planned out can help make things go smoother. There are several scenarios to consider, each of which may require different budgeting.

Once you stop working, you’ll most likely have to rely on sources like your pension, savings, investments, or social security to cover your cost of living. As you think about how and where you want to retire, you’ll most likely have to map out different options to see how they could play out financially. While this process might seem stressful, it doesn’t have to be if you plan early and get the people in your community on board with your plan.

The Cost of Senior Living

The cost of senior living varies from person to person and depends on factors like location, health care needs, and the setting. The national average right now is $54,000 per year, or $4,500 per month, when taking all of these factors into account. Most people cover this cost using a combination of sources, such as insurance, personal savings, and assets. Medicare and Medicaid can cover some senior living costs, but they won’t typically pay for room and board in a senior living community.

Since there are many different scenarios to consider, here are some of the average monthly costs right now:

  • Nursing homes: $7,908 for a shared room or $9,034 for a private room
  • Assisted living: $4,774
  • In-home care: $30 per hour

One thing to keep in mind with these costs is that location plays a huge factor. When it comes to assisted living, for example, the costs can be double in California compared to Missouri, as research shows. The level of care also comes into play. If you need a higher level of medical care or assistance, the cost will increase.

Also, the amenities included in places like senior living communities or nursing homes can have an effect on the monthly price. A place that has more to offer, like recreation facilities, spas, or other services, is going to have a higher sticker price compared to places with strictly the basics.

Budgeting Tips for Seniors

Something you can do as you start budgeting for seniors is look for ways to save here and there. As you get older, you may realize that you don’t need as much space or as many things, so downsizing can be a great way to start saving. Moving into a smaller home will have lower monthly utilities, maintenance costs, and either rent or mortgage payments. If you’re selling your larger home, you can hope to make a profit so that you can save a good chunk of it for the future.

As you work on your monthly budgeting, there are simple changes you can make to start saving. Take inventory of what you’re spending each month and how. Shopping for groceries on senior discount days, joining loyalty programs, and clipping coupons are all really simple and can add up over time. Programs like AARP or the American Seniors Association offer benefits and discounts that older adults can take advantage of. Your local community might also have programs especially for seniors to help with senior expenses.

Speaking to a Medicare broker can save you money when it comes to medical expenses. These professionals are paid by the insurance companies they represent and work with seniors to help them find the Medicare plan that works best for their lifestyles and budgets. 

Assisted Living Planning

When you start looking for assisted living options, there are a few things that you should prioritize during your search. The first should be the amenities and the services that you need. If you know that you have certain medical or health needs, you want to see if the senior community provides special care to address them. If you have daily preferences and routines, make sure that the community has a flexible schedule or that the staff can work with you to create your ideal schedule.

As mentioned, the location of the assisted living greatly affects the price. If you’re thinking about relocating, this could either increase or decrease your expenses. However, many choose to stay close to home so that they can easily have visits from family and friends. Having a social network is important as you get older, so it’s not a bad idea to stay close to your loved ones.

When you narrow down your list, go for a tour, or a few tours, to see what the senior community is like at different times of the day and the week. This gives you the opportunity to see the amenities, the quality of food, and the activities that are available to take part in. Is the senior community buzzing with activity? Or is it relatively relaxed? You’ll want to visit a few to see which clicks with your personality and lifestyle.

Long-Term Care Planning

Long-term care is the services and support that older adults need when they need assistance later in life, due to health, age, or both. The care can be performed in different settings, including nursing homes, assisted living, or right at home with professional help. Just like with senior living, each of these options has a different price tag attached depending on the level of care, the setting, and the offered amenities.

Before dipping into your savings, research the different ways that you can pay for these options. For example, long-term care insurance has become a popular choice since it can cover all, or at least part, of long-term care for seniors. The price depends on the policy that you choose and the amount of coverage that you need, but paying for this earlier in life can save you money further down the road. You can also look into life insurance with long-term care riders.

Other ways to pay for long-term care include:

  • Seeking out financial assistance
  • Understanding the full benefits of Medicare, Medicaid, and any veteran’s benefits
  • Community services
  • Looking for tax breaks
  • Reverse mortgages
  • Hybrid annuities with long-term care coverage

Planning for Healthcare Costs

Healthcare is one of the biggest expenses for seniors after they retire. Right now, research suggests that a retired couple over 65 can expect medical costs of up to $315,000, on average. While that number may seem enormous, that doesn’t even include the cost of assisted living or nursing homes. That’s why it’s so important to plan and budget early to save yourself the stress and worry later.

Medicare doesn’t cover long-term care, but it can cover some of your health-related expenses. Make sure you study what’s included in both Original Medicare and Medicare Advantage plans so that you can budget for out-of-pocket expenses after coverage is applied. Medicaid, on the other hand, does include long-term care and healthcare expenses, but only for those who are on a low income.

Supplemental insurance tailored for seniors can help fill in what Medicare and other health insurance plans don’t cover. Dental, vision, and hearing plans aren’t included in Original Medicare plans, for example, so these supplements make sure that you get the care you need at a more affordable price.

Start Early

Planning for senior living isn’t something that’s done in a day, so start early. Start by:

  • Researching settings
  • Looking into senior living communities
  • Looking for ways to save or reduce expenses
  • Review your insurance options

While this might seem like a lot, it gives you peace of mind knowing that there are options available to you. If you want to know more about SRG’s luxury senior living communities, reach out to us today to learn more about how we help our seniors live vibrant, healthy, and independent lives every day.