Many aging parents don’t want to spend the money to move to assisted living or assume they can’t afford it. But are they — and you — aware of the financial implications of staying in their house versus moving to a community?
Worrying About Savings
Research shows nearly 75 percent of Americans are behind on their retirement planning. How much do you know about your parent’s financial situation — from what regular income they have to what expenses they pay each month? Financial uncertainty can definitely increase opposition to the idea of assisted living. However, there is no reason for total uncertainty. You can do research, crunch the numbers, and use informed cost comparisons to provide detailed and accurate answers to your parent’s questions surrounding assisted living costs and affordability.
Determining Current Expenses
Monthly expenses to maintain a home are higher than many seniors realize. Costs associated with staying at home might include:
- Rent or mortgage
- Property taxes
- Insurance
- Utilities
- Home and yard maintenance
- Housekeeping and laundry
- Groceries
- Transportation
When combined with potential in-home care costs, living in their current home may end up being the most expensive option. Figure out your parent’s existing monthly expenses and see how that total compares to the average cost of senior housing in your area.
Considering Financial Options
Most families pay for assisted living costs on their own by using a combination of pensions, home equity, and savings. However, there are numerous other ways you can pay for assisted living. Options include:
- Veterans benefits
- Long-term care insurance
- Life insurance
- Bridge loans
- Income tax deduction
Calculating the True Cost
Providing care at home is fraught with financial risks and personal sacrifices, too. Family caregivers spend an average of 24.4 hours per week providing care, so it’s not surprising that caregivers often have to take time off, either paid or unpaid, while some have to reduce their work hours. Some caregivers even leave the workforce entirely in order to provide full-time care for a loved one. One-third of caregivers say they’ve also had to dip into their savings in order to cover caregiving-associated out-of-pocket costs. There are 40.4 million unpaid caregivers for adults ages 65 and older in the United States, according to data from the Bureau of Labor Statistics. The unpaid care they provide is estimated to be worth $470 billion per year in a report by the AARP Public Policy Institute. Caregiving is rewarding, but your family needs to be prepared for the impact that care has on your life.
Handling the Objection
If your parent objects to assisted living by saying, “I can’t afford it,” talk with them about the different financing options and how they might be able to pay for it. Strategies that can help your loved one afford assisted living without compromising the quality of care include long-term care insurance, life insurance, veteran’s benefits, a reverse mortgage, a bridge loan, and price flexibility. Have resources ready for both of you to review together. Try saying something like, “Quality assisted living is certainly an investment that deserves careful attention and thorough research. But did you know that it will actually cost about the same as or maybe less than you’re paying for your house?” Show them the research you have done on how much they’re spending on their mortgage, taxes, maintenance, utilities, and other costs, and remind them about all the things that are included in the monthly assisted living fee. Three meals a day served daily in the dining room, personal care services, 24-hour staffing, weekly housekeeping including flat linen service, health promotion and exercise programs, medication reminders, cultural and educational activities, social programs, scheduled transportation, and maintenance — it’s all included. As you help your parent transition to a new stage of life, it helps to be prepared with answers to their questions and concerns. For more insights into common objections and strategies for how to handle them, download our eBook The Standoff: Coping with a Parent’s Objections to Assisted Living.