Assisted Living Costs Explained: A Complete Guide

When your loved one needs more help than you can provide at home, it may be time to think about assisted living. With this living option, their unique needs are taken care of, including cooking, household chores and more, freeing up time for them to do what they love in their retirement.

If you’re considering assisted living for a senior in your life, you’re likely asking yourself questions like, how much does assisted living cost? Or, is the cost of assisted living tax-deductible?

We’re here to answer these questions and more — and explore potential payment options to help you make a confident decision regarding your loved one’s future.

What Is Assisted Living?

An assisted living community offers compassionate care in a home-like environment while giving your family member freedom over their day-to-day life. It’s perfect for older adults who need more help getting through their day.

Residents typically live in cozy apartments with access to amenities and services to make their lives easier and more enjoyable. Assisted living communities have trained caregivers on-site to help residents with activities of daily living (ADLs), such as eating, bathing, dressing, transfers and more.

What Is The Average Cost Of Assisted Living?

According to the 2021 Genworth Cost of Care Survey, the national median monthly cost of assisted living in the U.S. is around $4,500.

However, expenses for your family member can range between $3,000 to $7,000 depending on geographical location, individual needs and amenities provided.

This cost typically includes accommodations, three nutritious meals a day, assistance with ADLs and fun social and recreational activities for your loved one to enjoy.

Is The Cost Of Assisted Living Tax Deductible?

According to the IRS, medical expenses over 7.5% of your adjusted gross income (AGI) are tax-deductible. This means the medical portion of assisted living, such as caregiver assistance, is deductible, while non-medical expenses like meals and accommodations aren’t.

Please consult your financial planner if you’re unsure about what to deduct.

Factors Affecting The Cost Of Assisted Living

Here are some key factors that impact the cost of assisted living:

Location: When looking for a community, it’s important to understand that location affects cost. Like real estate pricing, care communities in urban areas are more expensive than those in rural areas. Prices can also vary from state to state, depending on the cost of living. For example, the median monthly fee for assisted living is approximately $4,000 in New York and $1,800 in Louisiana.
Accommodation options: The size and type of housing can also influence the total cost.
Amenities: Communities that provide a wider range of amenities like spas, fitness centers and game rooms will be more expensive than those that offer fewer amenities.
Level of care: You may have to pay more if your loved one requires one-on-one assistance to get through their day, or if they need specialized medical attention.
Additional services: Some communities offer additional services such as transportation and specialized therapy sessions for an added fee.
Moving fees: Although it’s a one-time expense, it’s important to know that you may incur significant moving fees when a family member transitions into a senior community.

Ways To Pay For Assisted Living

Let’s look at a few ways you can pay for assisted living:

Long-term care insurance: Long-term insurance covers life-changing occurrences, including chronic illness and disability due to old age. So, most long-term care insurance policies will cover assisted living.
Medicaid: Each state governs its own Medicaid eligibility and coverage, so there can be variations depending on your location. In most states, Medicaid will cover your loved one’s caregiver assistance and medical expenses in assisted living, but you’ll likely have to pay for accommodation fees out of pocket. It’s important to note that Medicare does not cover assisted living costs.
Personal savings and investments: Personal savings and investments can provide a good source of funds to pay for assisted living.
Life insurance: Some life insurance policies cover long-term care costs by allowing policyholders to use a portion of their benefits.
Pension: Pensions can be another way to pay for assisted living.

Use The StoryPoint Group Cost Calculator

Our cost calculator is here to help you get an estimate of the cost of assisted living where you live:

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**Senior Living Compared To Staying In Place**

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Independent Living: For independent seniors who want to maintain an active lifestyle while downsizing their daily living responsibilities.

Assisted Living: Provides daily support for seniors who need help with tasks such as medication management, bathing and dressing.

Memory Care: Specialized care for seniors with Alzheimer's disease, dementia or other memory impairments.

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