assisted living cost
If there’s one thing we can count on to happen year after year, it’s a rise in the cost of living. Be it small or great, it’s bound to happen to some degree. For most people, this discussion focuses on things like grocery bills, or how much it takes to fill the gas tank. For seniors and their families, however, it also includes concerns about the rising cost of assisted living. Over the last couple of years, prices have gone up in many parts of the country as COVID-19 strained supply chains and staff availability. Even without a pandemic, though, researchers are forecasting that assisted living will become even harder for seniors to access by 2033.
What the NORC study predicts about the price of assisted living in 2033
Whether you’re looking at retirement homes or home care, there’s no question that assisted living is quite costly – and no question that it’s only going to become more expensive over time. While this is to be expected, it’s been predicted that several different factors may combine to make assisted living inaccessible for the next decade’s seniors.
NORC researchers at the University of Chicago analyzed patterns in income growth, costs of living, and more for the next ten years. According to their estimates, it’s possible that among middle-income people over the age of 75, more than 11 million of them won’t be able to pay for assisted living. Plus, since they won’t qualify for assistance from Medicaid, they could be left to figure out some less suitable alternative.
To make matters worse, these same seniors are less likely to have the safety net of spouses or children. Family support systems are something that many seniors rely on, whether it’s for financial support, live-in care, or something in between.
Meanwhile, an estimated one-third of people under 85 will probably have some kind of cognitive impairment, with the number rising to 40% for people who are 85 or more. Just over half of seniors will also have three chronic health conditions or more, and will likely struggle with their mobility. These predictions highlight the need for some form of assisted living, while also pointing out the dwindling ability of seniors to afford it.
Why seniors need assisted living
As people age, things often get more difficult. Physical tasks become harder, and forgetfulness may become an issue. Even seemingly trivial sicknesses can turn into medical crises, and matters of basic hygiene could start to fall by the wayside.
What’s the right choice when this starts to happen? For most, the answer is to arrange for some form of assisted living. This decision can be almost as hard for the family as it is for the senior, as they often bear some of the responsibility. From moving their loved one to a different place, to shouldering some of the facility costs, many families are instrumental in looking after their elderly relatives’ well-being as they age. According to the US Office of Personel Management, "The cost of long term care can be expensive and vary greatly depending on the type of care you receive, the place it's provided, and where you live. For example, the national average cost for a semi-private room in a nursing home is $112,420 per year."
How do people afford assisted living?
When someone is looking at their options for assisted living, the final choice may depend on their budget. Even after years of planning and saving, they may only have enough to cover the basics. Most people draw on personal savings, pension payments, retirement accounts, or similar resources to pay for assisted living. Their children sometimes also help out, either with all or part of the monthly bill.
There are other options besides personal savings accounts, though. Some seniors plan on selling their houses once it’s time to move out, since they won’t have any use for them when they’re in an assisted living facility. However, others prefer to keep the house as a sort of “rainy day” fund, in case there’s a sudden medical emergency or some other unexpected cost.
Another option is to find a third party who would buy their life insurance policy. Some benefits will still be retained, but part of the value would be reimbursed in cash. The life insurance company will also buy back the policy, also for cash. This would mean giving up the benefits entirely, but the trade-off is a better life in an assisted living facility.
Conclusion
The next decade will be increasingly tricky for seniors to navigate as they search for affordable assisted living, but hopefully some forethought and creative planning will help them get the care they need.