Updated: 1/21/2025
If your loved one has decided to take advantage of the benefits of senior living, it may be time to discuss the community’s rates as well as the services and amenities that are included.
Once the monthly fees are known, families will typically create a budget and confirm how best to fund the senior living expenses. There are several sources of funds that can contribute but there are also a few ideas that are often overlooked. Here are some of the many ways to pay for senior living.
Creating the budget
The first step in paying for senior living starts with establishing an accurate budget. Prices can vary widely depending on the level of care, amenities offered, and even geographic location – so it’s always better to talk directly to the senior living community about their rates instead of relying on general estimates.
When discussing fees with the community of interest, you’ll want to ensure you have a clear understanding of all the services included or if there are any à la carte choices that can be charged separately.
Once you have the monthly total amount for the community, you’re ready to start locating available sources to contribute to funding senior living for your loved one.
Conventional funding sources to consider
You may be wondering, “Does Medicare pay for senior living?” Medicare will generally not pay for custodial senior living, including help with daily tasks, but it may cover skilled nursing care, such as physical therapy or wound care, as well as a few preventive services and transportation to medical appointments.
Most senior living expenses are paid from private funds. The following list includes common funding sources when it comes to paying for senior living:
1. Personal savings
Your parents may have savings to contribute to paying for senior living expenses. When discussing possible funding sources, make sure to include all bank accounts that are applicable. Adult children may also be able to contribute to the fund.
2. Income
An older parent may have income from a variety of sources that may be available to pay for a portion of the expenses. If your loved one qualifies and is receiving Social Security payments, these benefits could also contribute.
3. Retirement funds
Retirement accounts can also be tapped to pay for senior living, such as a 401(k) or Individual Retirement Account (IRA).
4. Investments
Make a list of all possible investments and their values. This might include stocks, bonds, annuities, real estate, or personal property – including collectible automobiles, jewelry, or artwork – that could be sold and converted to cash to help with paying for senior living.
5. Home equity
For many people, their home is their largest asset. Selling the home can free up funds for senior living, but there are also other ways to take advantage of the home’s equity. Reverse mortgages or converting a portion of the equity are other possibilities to consider.
→ Curious About Affording Senior Living?←
Take Our Quick Survey!
More ways to pay for senior living
The following ideas may also provide a source of funding senior living expenses:
1. Life insurance policies
Families may be unaware that some types of life insurance policies can be utilized to cover senior living expenses. If your parent has a policy, discuss possible options such as cashing out for a lump sum payment or transferring ownership to an administrator to make payments directly to a senior living community.
2. Long-term care insurance
Adult children may be unaware that their parents have purchased a long-term care policy. These policies must generally be taken out before care is needed or before reaching a certain age. There may be qualifying factors to begin payments, and the terms and conditions should be verified.
3. Veterans Benefits
If your loved one is a Veteran or the surviving spouse of a Veteran and meets certain health requirements, there may be assistance available to pay for senior living including the Aid & Attendance benefit. Other qualifications include financial limitations, military service and medical or personal care requirements.
4. Bridge or gap loans
What are bridge loans? When considering how to pay for senior living, families may also be unaware of loans that can bridge the gap while waiting for funds to become available, such as in a sale of the home or the waiting period for some retirement benefits. Proceeds from the bridge loan are usually received quickly and will be repaid when the asset transaction is completed.
Thinking about your options for paying for
Thinking about your options for paying for assisted living or memory care? Galloway Senior Living offers quality assisted living and memory care in Wadsworth, Illinois. Our state-of-the-art community was designed to provide residents and their families with an affordable luxury experience, including comprehensive care and top-notch services and amenities. For even more tips, we invite you to download our complimentary informational guide, “Funding Senior Care and Housing Guide.”
