Senior Living Prices: What Will It Cost?
Janelle Meyers, CSA®, LALD
There are many things that people consider when choosing to move into senior housing. The location, activities, amenities offered, types of apartments are just a few. As a certified senior advisor, one of the most common question is, “what is this going to cost?” Whether you have a lot to spend or a little to spend on senior living, cost matters. Below are some things you should be aware of and plan for as it relates to making the move.
Average Cost of Care
Like everything else we pay for, the cost of care is rising. According to the Genworth: Financial Solutions for Long Term Care (www.genworth.com/aging-and-you/finances/cost-of-care.html/) the average cost for a one bedroom assisted living apartment in the Minneapolis/Saint Paul area in 2021 was $5163.00. This year, you can expect to pay $5642.00. This is for base rent only. Care costs will be in addition to the rent. For home health aide services, you can expect to pay around $40.00 per hour. Adult day health care will be about $109.00 per day. The cost of a nursing home facility is the most expensive at $469.00 per day for a private room.
Keep in mind this is the average cost of senior living. It could be higher, and it could be lower. When it comes to the actual cost of your care, it will be determined when the assessment is completed by the nurse prior to moving in. At Choice Connections, we emphasize that it is important to be proactive and have a plan. Part of planning is knowing what you might expect to pay. Our team can help you determine the best choices based on your financial situation.
Rent and Care Increases
In my previous role as an executive director, one of the tasks I was responsible for was budgeting. This meant that almost every year I would send letters to families and residents notifying them of rent and care increases. Honestly, it still gives me a little anxiety thinking about it. This is because I knew without a doubt that I would be getting lots of phone calls, emails, and requests to meet about the notification. People were concerned about their money and rightfully so.
On average, most of the communities I worked for had a 3% increase in rent and a 3% increase in care for a total increase of 6% when people received care services. This was typical until 2021. For the years of 2021 and 2022 the rent and care increases were sometimes more than 10%. Some facilities raised rent and care twice in a 12-month period. In 2023, increases were still higher than the average 3%-6%. For 2024, when surveying senior living most have shared an increase between 4%-8% for the annual increase. Most communities are required to give you advance notice of 30 days for changes to the contract including pricing. I always tell clients and families to check the terms of the contract.
Where Does the Money Go?
Senior living can be expensive. Most people pay out of pocket for their rent and care. Some people utilize long term care insurance and others might need public assistance. Each senior living community is different in what payor sources they accept. It is important to know and ask before moving in, especially if a family is worried about not having enough money to pay privately.
When it comes the cost of senior living here are things to consider:
- Most rent includes utilities like electricity, gas, water, trash and often Wi-Fi and cable
- There is on-site staff
- They are maintenance free
- Social programs
- Transportation (often not to individual appointments)
- Meal allowance
- Fitness centers
- 24 staff available on-site
- Restaurant where you can purchase additional meals
As you can see by the list, senior living communities are rich in amenities. Even if you don’t utilize everything available, it is there for you. Think of it like being on a cruise ship. There is a lot offered and you choose what you want to participate in.
In summary, you can expect that the cost of senior living will rise at the same rate as inflation. All communities set their own pricing. In more affluent areas you will pay more rent. Rest assured, there is a place for everyone regardless of your ability to pay. At Choice Connections, we can help you to determine which of the options is going to be best for you. You can learn more by visiting www.choiceconnectionsmn.com