What Happens If I Run Out of Money in a Retirement Home?
Are you considering moving into a retirement home? It’s a great idea. You will enjoy the comfort, safety, and companionship that an established senior living facility provides. Since there are many different types of retirement living communities, you should take the time to explore your options carefully. Also, think about how you are going to pay for the cost of a retirement home. It is not uncommon for money to run out, and you don’t want this to happen to you.
Average Cost of a Retirement Living Facility
The best way to ensure you have enough money to pay for the cost of a retirement home is to determine your budget and plan accordingly.
Here’s what the average rate for long-term care in the United States was in 2020:
- $7,756 per month in a nursing home for a semi-private room
- $8,821 per month in a nursing home for a private room
- $4300 per month for care in an assisted living facility for a one-bedroom unit
It is also essential to ask about the included amenities and which services have an additional charge. Some senior living facilities charge extra for certain services, such as room cleaning, laundry, and assistance with personal care. Remember to budget for your changing needs.
3 Types of Senior Living Costs
Entrance Fee and Month-to-Month Costs
Many retirement living options are available for seniors, including independent living, assisted living, and skilled nursing, with varied payment structures. Some communities offer a month-to-month program and service agreement, while others allow you to rent an apartment and get amenities for a monthly fee.
Continuing care retirement communities – Offer multiple levels of care for seniors. They have an entrance fee-based payment structure with an initial entrance fee you have to pay when joining the community. You may also have to pay smaller monthly fees.
Entrance fees – Typically depend on the type of apartment you select and the services offered along with it. Smaller units have a lower entrance fee than larger ones. Some facilities may also charge for exclusive meal plan options.
There are two types of entrance fees:
- A non-repayable entrance fee – Costs less but generally doesn’t include any refund if you decide to move out of the retirement living facility.
- A repayable entrance fee – Costs more but also offers some repayment in the future when you want to move out of the facility.
Health Care Costs
Some retirement living facilities allow their residents to stay in one community, even if there is a change in their health care needs. Their prices are usually predictable, and you can also budget for the care you may need in the future. Many retirement homes having an entrance fee maintain the same monthly rate no matter the change in the level of care offered. Some institutions keep the standard monthly charges for a specific time in a skilled nursing home or assisted living setting and may increase it based on the cost of care later.
Monthly and Service Fees
Senior living communities charge a monthly fee for daily expenses such as household maintenance, meals, transportation, and more. In addition to the monthly payment, they may charge fees based on specific services.
How to Afford a Retirement Residence
It is a good idea to have a financial plan in place. This will help reduce the stress of how to come up with the money and avoid missing payments. It helps to know that payment options for retirement living homes differ. Some will allow you to pay in installments, making it easier for you to manage your finances. Don’t forget to ask these questions and clarify any doubts before you sign on the dotted line. Also, check if you are eligible for any local, state, or federal aid.
It is not difficult to find a retirement residence that will fit your budget and your needs. When looking, consider the following:
Medicaid and Medicaid Waivers
Most assisted living facilities and retirement homes accept financial assistance. Many states offer Medicaid payments for eligible seniors, including payment for services such as housekeeping help, medication reminders, and more. They also have different programs to help seniors pay for assisted living.
Retirement plans are an excellent great way to save for retirement. This includes both through an employer and self-funded. You can work with a trusted investment firm and contribute to your plan.
Long-term care insurance is a supplementary option. It is meant only to cover the cost of assisted living and other long-term care programs. You can choose an employer-sponsored retirement plan or purchase one off the public market.
If you are in a higher income bracket, you can fund your retirement out of your pocket. In this case, it helps to know what to expect when preparing for living in a retirement living community.
Explore Affordable Retirement Living Options with Us
The Holiday Retirement is a family-owned business with different types of senior living facilities. We serve individuals with varying needs, and our rates are among the most affordable. Every member of our staff treats residents with respect and the highest level of care.
If you want options for affordable retirement in Hartford, call us at 1-860-233-8202 today to learn about our retirement living communities in West Hartford. You can count on our dedicated family to look after you.