Aging in Place Essentials: Part 3 – How Can Aging in Place Save You Money?
Aging in Place can provide a much more affordable alternative to the high cost of independent living facilities, assisted living facilities and community care retirement centers. Our blog post this week explores how staying put in your own home will more likely save you money.
How Much Do Independent Living Facilities, Assisted Living Facilities and Community Care Retirement Centers Cost?
Independent living facilities is a general term for housing arrangements for seniors who do not need assistance with daily activities. These facilities come in the form of retirement communities, retirement homes, senior housing and senior apartments. Most of these facilities provide common areas for meals and socializing. Some independent living facilities also have medical and personal care services. However, you still remain independent, having your own housing and receiving less care than you would find at an assisted living facility. Services available at independent living facilities include laundry, meals, transportation and some social activities.
Assisted living facilities are long-term facilities for elderly or disabled people who are able to get around on their own but need help with some daily activities, such as medication assistance/management, bathing, dressing and transportation. Traditional options for assisted living facilities include:
- Three meals a day served in a common dining room at prescribed times
- Housekeeping services
- 24-hour security
- Exercise and wellness programs
- Laundry services
- Social and recreational activities
Community care retirement centers (CCRCs) typically have three or four levels of care: independent living, assisted living and skilled nursing. These organizations offer you assistance as you need it. Perhaps you are healthy and do not need any support. Down the road, though, you might require a nurse. Community care retirement centers accommodate your needs as they change. Many even offer hospice care and end-of-life services. This housing allows seniors to remain at one residential location regardless of their health. CCRCs require you to pay an entrance fee. But beware, if a CCRC goes bankrupt, residents can lose part or all of their entrance fee. According to AARP, there are three types of contracts for CCRCs:
- Life Care or Extended Contract: The most expensive option, but offers unlimited assisted living, medical treatment and skilled nursing care without additional charges.
- Modified Contract: This option offers a number of services provided for a set length of time. Once that time has expired, other services can be purchased, but for higher monthly fees.
- Fee-for-Service Contract: This option has a lower fee, but there are no long-term care benefits included in the contract. You will need to pay for long-term care benefits at their market rates when you need them.
The above mentioned most commonly available types of senior communities, however, might not be cost-effective. Whatever your rent is, your costs can quickly pile up, leaving you with a hefty bill:
- Independent living facilities can cost between approximately $20,000 and $42,000 per year, depending on your locality and what services are included.1
- In 2013, assisted living facilities had a median annual cost of $41,400.2 This was up 5% from the previous year.
- Community care retirement centers have a national average entrance fee of approximately $250,000,3 and rent usually amounts to $3,000 to $5,000 per month.4 The cost of CCRCs also depends on your health, the kind of housing you have chosen and the number of residents in your facility.
Why Aging in Place Could Be The More Affordable Option
The cost of staying put in your current home, of course, depends on the condition of your home and your needs. Certain modifications may be necessary. In the long run, though, these purchases could save you money and keep you comfortable in your home. By not entering a senior care facility, you will hold on to thousands of dollars each year. Marty Bell, Executive Director of the National Aging in Place Council, estimates that annual cost for Aging in Place is $23,000.5 In a four-year analysis, the total costs for Aging in Place were thousands of dollars less than institutional care options.6 If you carefully invest in Aging in Place home improvements, you can come out ahead in the long run with Aging in Place, and also have the great joy of staying in your home as long as possible.
There are many hypothetical premises, of course, behind the above calculations. For example:
- For simplification, it is assumed that the Aging in Place senior remains in good enough health to remain in his or her home.
- For simplification, it is assumed that there is no significant inflation in costs.
The above costs are the national averages for a single person. These numbers may be higher depending on your state. Costs for a couple will be 25 to 50% higher.
Certain grants and programs can also make Aging in Place more affordable:
- Veterans are eligible for SAH, SHA and HISA grants through the VA that fund home remodeling projects.7 Your annual income and assets need to be below a certain threshold to qualify for these grants.
- The Department of Agriculture offers Rural Repair and Rehabilitation grants to assist rural homeowners renovate for Aging in Place.8 These grants are designed for low-income homeowners. Those who qualify for these grants usually have less than 50% of the median annual income for the area.
- Rebuilding Together is a national nonprofit aimed at seniors and veterans that offers financial assistance and volunteer labor for home modification projects.9 Rebuilding Together usually focuses on assisting low-income seniors.
- Many states offer Home and Community Based Services (HCBS) waivers through Medicaid, which allow individuals to avoid nursing homes and hospitals, often by modifying their houses.10 To qualify for an HCBS, you need to be below a certain income. This number will vary depending on your state.
Many of these grants have eligibility requirements. If your assets and annual income exceeds a certain level, then you may not be able to qualify for these grants.
Having financial security is a great benefit of Aging in Place. We hope that this blog post has clarified the often confusing question of how it compares to various senior living communities. Check back in at Staying Put at Home to see the rest of our series on Aging in Place:
Aging in Place Essentials
- Making Your Home Safer & More Comfortable
- How Can Aging in Place Save You Money?
- Maintaining & Modifying Your Home: Who Can Help?
- How to Make Your Bathroom Safer
- Guide to Senior Housing Options
- Nursing Home Costs Top $80,000 A Year
- Continuing-Care Retirement Communities: Weighing the Risks
- About Continuing Care Retirement Communities
- As Senior Population Grows, Aging in Place Gains Popularity: Communities Conducting Outreach
- Aging in Place Preserves Seniors’ Independence, Reduces Care Costs, Researchers Find
- SAH, SHA & HISA Grants: Home Modification Help for Elderly and Disabled Veterans
- Rural Housing: Housing Repair Loans and Grants
- Rebuilding Together
- Home & Community Based Services