Retirement should be a time of ease, but for many older adults, financial stress overshadows the golden years. Nearly half of retirees (43%) say they don't have enough savings for a comfortable retirement, and over a quarter (27%) report having no savings left at all, according to a Clever Real Estate survey. If you or a loved one is concerned about paying for assisted living, you're not alone.
The good news? There are smart financial strategies that can make assisted living more affordable without sacrificing quality of life. From leveraging personal savings to exploring veterans' benefits, insurance policies, and alternative income sources, this guide breaks down practical solutions to cover senior living expenses.
Many seniors rely on personal savings and retirement accounts to cover assisted living costs. These funds come from sources like 401(k)s, pensions, and individual savings accounts.
Most seniors have access to some form of retirement income, yet how they withdraw and use these funds matters. Timing withdrawals strategically can reduce tax burdens while ensuring steady cash flow. For example, delaying Social Security benefits increases monthly payouts.
Some effective ways to use retirement funds include:
Selling a larger home and moving into a smaller space or a senior living community can free up cash. Many seniors find that downsizing not only adds to their savings but also simplifies daily life.
This type of insurance helps cover the cost of funding senior care, yet not all policies include assisted living. Those with an active long-term care policy should check their benefits. Some policies cover room and board, while others only pay for personal care services.
Factors to review include:
Seniors who don't already have long-term care insurance may find policies harder to obtain later in life. Premiums increase with age, and pre-existing conditions can make approval difficult.
Military veterans and their spouses might qualify for financial assistance for seniors through the VA Aid & Attendance benefit. The program provides additional funds for veterans who need help with daily activities.
To qualify, veterans must meet at least one of the following:
The Patriot Angels organization helps veterans navigate the application process. Veterans living at Addington Place of Mt. Pleasant may also qualify for additional savings through the Veterans Program, which offers half off the first month's rent each year.
For many, home equity is their largest financial asset. Selling or renting out a home can provide cash flow for elder care payment options.
Selling a home can generate a lump sum of cash, which can be used to pay for assisted living. This approach works well for those who no longer need or want the responsibilities of homeownership.
Renting offers a way to keep the property while generating income. Yet, managing a rental can be time-consuming. Hiring a property management company can simplify the process.
Many people don't realize they can use life insurance to help pay for senior living expenses. Some policies allow owners to access benefits before passing away.
Two ways to use life insurance for assisted living are:
Each option has different rules, so checking with the insurance provider is necessary.
Bridge loans provide short-term funding for families who need immediate cash while waiting for assets to sell. These loans can cover move-in costs, deposit fees, or the first few months of rent.
How bridge loans work:
Because these loans must be repaid, planning a repayment strategy before applying is important.
Sometimes, relatives pitch in to help cover senior living expenses. Family support can take different forms, from direct financial help to sharing caregiving responsibilities. They include:
Families who plan together can find solutions that ease financial stress while ensuring their loved one gets the care they need.
Annuities can provide a steady income stream to cover senior living expenses. These financial products convert a lump sum into regular payments over a set period.
Types of annuities for assisted living include:
Annuities work well for those who want predictable income, yet not all annuities are suitable for assisted living. Checking contract terms is necessary to ensure flexibility.
Planning for the future starts with knowing your options. Whether through savings, insurance, or veterans benefits, paying for assisted living doesn't have to be a financial burden. The right approach can help secure a smooth transition into a community where care and comfort come first.
At Addington Place of Mt. Pleasant, we offer a warm, inviting environment with thoughtful amenities, from chef-prepared meals and engaging activities to well-appointed apartments designed for comfort. Our Veterans Program provides significant financial savings, and our caring team is here to help guide you through your options.
Schedule a tour today and see firsthand how we make assisted living both affordable and enriching.