If you or a loved one such as a spouse or parent are considering a senior living option such as assisted living or memory care, finances are likely at the forefront of your mind. Protecting seniors’ financial security is a critical task that can be complicated by fixed incomes or increasing medical needs, so preparation is key – the earlier the better. If an extra level of support is needed, delaying action increases the risk of injuries, health complications or decreased quality of life. While it is a considerable undertaking, people often find that gaining a clearer perspective on finances puts their mind much more at ease than the preceding uncertainty. Many also discover that transitioning to a senior living community is actually a more secure option than in-home care.
“The cost of assisted living can seem overwhelming at first glance. However, compared to the average cost of a nursing home ($5,000 to $10,000 per month) or in-home care (about $4,000 per month for 40 hours of care per week), assisted living is often one of the more affordable and convenient options if your loved one doesn’t need close medical supervision.”
How to Approach the Planning Process
One of the most straightforward ways to determine whether or not senior living is the right choice for you or your family’s situation is by conducting a cost-benefit analysis. As the name suggests, a cost-benefit analysis is a systematic process that allows you to clearly and objectively weigh the pros and cons of a decision. They are common in business settings but are equally effective at assessing personal financial decisions like these. At a base level, there are three steps to the process:
- An assessment of the costs associated with the potential options
- An inventory of your or your loved one’s finances
- A comparison to identify the most viable option
Assessing the Costs
To narrow your search criteria, you must first decide which level of care is needed since needs vary from person to person and there are different costs associated with different levels. When exploring your options, it is advisable to research Continuing Care Retirement Communities (CCRCs) as they will offer the full spectrum of care levels, so a person needn’t uproot their life if their needs change. When assessing the cost, factor in the cost of the senior living option itself as well as that of medications, ongoing medical treatment, etc. Then, use those same needs for the criteria of the cost of home care. Note that home care costs include not only the medical or care services themselves, but also the ongoing costs of remaining at home, including:
- Yard work
- House maintenance and repairs
- Cable/Internet/TV
- Water and electricity
- Cleaning
Taking Inventory of Personal Finances
First, assess retirement savings, social security payments and additional incomes such as investments or pensions. Next, take stock of additional assets, such as houses or vehicles that could be sold in the event of a move. Use the final amount as a foundation when making comparisons. If this number falls short of where you’d ideally like to be, don’t panic. There are additional ways to potentially supplement your personal finances, including:
- Veteran’s benefits
- Life insurance
- Pooled family resources
- Long-term care insurance
- Reverse mortgages
- Renting out your house
- Medicaid
A more in-depth breakdown of how to compare the costs of an assisted living or memory care community with home care can be viewed here.
If you think a continuing care retirement community is the right choice for your situation or would like to learn more about dealing with the associated costs, contact Inland Christian Home online or call today at (909) 983-0084.
