You’re right to have concerns about how much Independent living residences will cost. Your current arrangement probably has some advantages there. But there are hidden costs to living alone, too, things nobody budgets for like appliances breaking or hiring someone to cut the grass.
In addition, retirees on a fixed income have reason to be concerned about the escalating costs of medical care. What happens if you get sick?
It’s hard to budget for the unknown. Most financial advisors tell you to reduce the expenses associated with what you know you need to budget for and save the difference to prepare for what you can’t predict.
Making the Most Financially Sound Decision About Your Living Arrangement
An easy way to determine if independent living is the right choice for you financially is to keep track of your expenses for one month and determine if that total amount could be reduced by an all-inclusive independent living solution.
For example, if you are making a mortgage payment that expense could be directly offset by the cost of your Independent living residence. But an Independent living residence could offer additional amenities you cannot access from your current home.
The cost of the Independent living choice can be compared to your current expenses through that budget exercise. But don’t forget to factor quality of life issues in your current arrangement, such as limited transportation, the inconvenience of shopping and other daily chores, and possibly even isolation.
Estimating the Cost of Independent Living Arrangements
Be sure you fully understand the fee structure at the Independent living facility. It may be a flat rate for everything you need or it may be a rental or mortgage, plus additional charges for services a la carte. You’ll want to ask the executive director of the communities you’re interested in for a detailed quote so that you can compare them and make budgeting part of your final decision process.
Try to imagine what your life will be like as you age. What kind of additional help do you think you’ll need? You’ll need to consider how much more your care will cost five years or ten years from now and determine if you can afford an Independent living arrangement now.
The more expensive community is not necessarily the best. Remember that your top needs and the friendliness and warmth of the staff are the best indications you’ll be happy with your choice.
Independent Living Financing Options
Medicare and Medicaid won’t typically cover the cost of independent living, although there are still some options on the table. In general, though, it’s a good idea to expect your personal savings and income will have to cover the expenses and to budget accordingly.
Competition for residents is getting fierce and financing rates for healthcare residences to expand and grow are pretty low right now. It’s a good time to be shopping and a better time to lock in a rate you can live with.
Long-term care insurance may cover the expenses of an independent living community, in particular the cost of additional services like cooking and cleaning that may have made the top of your priority list. If you have Veteran’s benefits, these may cover expenses as well.