Understanding the Cost of Assisted Living: Budgeting for Senior Care
Understanding the Cost of Assisted Living: Budgeting for Senior Care
For many of us, our retirement years are full of dreams to look forward to. Working hard means that in retirement, you can live easy, pursue your dreams, learn new hobbies, and enjoy life, which is why good financial planning and budgeting for the cost of assisted living is a smart move. While many may not need assisted living in their lifetime, it’s estimated that seven out of ten people will.
Understanding the cost of assisted living can be tricky, but this article by BridgeWater Assisted Living offers a comprehensive guide and some insights into budgeting and planning for a vibrant future.
Understanding the Costs of Assisted Living
Recent statistics for assisted living residents show that the average cost of assisted living is $5,030 a month, and the average stay is 22 months.
While many may not need to move to an assisted living community, there are plenty of reasons why one might want to move there. Assisted living communities provide a homey environment with services and amenities that can give people the lifestyle of their dreams. Many of these services involve medical assistance, so most people choose assisted living.
Most assisted living communities provide what is referred to as “assistance with activities of daily living” or “ADLs.” These activities include assisting in medication, grooming, bathing, toileting, dressing, eating, and even getting up or down. Some assistance options are covered under the state Medicaid plan for some states, like Arizona.
While this Medicaid coverage doesn’t cover room and board, it can cover the medical and other services provided by assisted living communities for those who qualify, including physical, occupational, or speech therapy, diagnostic exams, and dental services.
Assisted living communities provide many other amenities, depending on the location and the desired lifestyle. Housekeeping, laundry, and meals are other services that can affect assisted living costs. Many communities offer fitness and wellness classes, activities, art and music therapies, and entertainment options. While it might seem very convenient and exciting to golf right outside your door or watch a staged Broadway musical, there are costs associated with maintaining and staffing any community.
Financial Planning for a Bright Future
To keep our golden years golden, we all have to make smart moves financially and physically. Staying physically active and as healthy as possible is one important goal. What most people fear about aging is losing their independence, which is why assisted living is such a smart move for some. It is designed to keep people living as independently as possible and enjoying all that life offers, even when they need a little help. For most people, that help starts before retirement with sound financial advice.
Most financial advisors will calculate your current lifestyle with some inflation and formulate an investment plan. However, other investment options like life insurance plans with long-term care options, annuities, and even long-term care policies might be appropriate. It is important to meet with a professional financial advisor to review these options.
While most people plan to retire and enjoy their lifestyle in the comfort of their own homes, it’s essential to plan for the unforeseen, especially if they plan to pass the home on to children or other relatives.
For some, renting out their home to cover assisted living costs can be a smart move. Making sure that your home is managed by a professional property management company is key. Most property management companies take a fee that can be anywhere from 6 to 12 percent of the monthly rental but will handle all of the maintenance work associated with rentals. There will still be maintenance and repair costs, but this is one way to avoid selling your home.
Good Plans Involve a Good Budget
While you can’t gaze into a crystal ball to know how much something will cost in the future, you can thoroughly examine your current living costs. Taking a realistic look at your current budget will help you plan for a future budget. By doing this, you’ll also be able to see where your money is going now and find ways to shave off some costs to save for the future.
It’s important to know what you’re spending right now and what you shouldn’t spend money on in the future. It can be as easy as looking at your bank statements, plus most credit card companies provide a breakdown of what you’re spending your money on. If you don’t keep track of your finances right now in some financial data software like Quicken or NerdWallet, you should consider doing that to watch what you spend over time.
Take a deep dive into your spending habits today to see where you might save some money now and put it away for the future. You might eat out for lunch every day, subscribe to a meal-planning service, lease a car for work, or go out for drinks with coworkers. Even the cost of dry cleaning might be expenses you have now but won’t later, and it’s a healthy assumption that your clothing budget might also change when you retire.
Look at where you are currently spending and consider what you will no longer need when you’re not working. This might also make you want to curb some of your current spending habits. Look for ways to save money, like getting generic prescription brands and signing up for age-related discounts. The more money you save now, the more you can invest in your future. In Arizona, BridgeWater Assisted Living communities offer an affordable lifestyle surrounded by sunny skies and desert beauty. We invite you to come and experience it for yourself since it’s never too early to plan for the future. Schedule a visit with us today to see how bright your future can be!