Paying for Assisted Living: Financial Options and Considerations

California's aging population has made the demand for senior living higher than ever. By 2040, 22% of California residents will be above the age of 65, according to PPIC. That's a 59% increase from 2020!

Paying for assisted living can be stressful, but it's necessary for many families. Luckily, considering all aspects of senior care financing and knowing your financial options makes the process much smoother.

Read on to get informed and make the right decisions about assisted living costs!

What to Consider When Paying for Assisted Living

Knowing the average cost of assisted living in California can help you make wise decisions when paying for assisted living.

The average cost of assisted living in California is about $5,250 monthly. This is well above the national average. CA is one of the most expensive states to seek assisted living in.

However, this doesn't mean that all hope is lost! The price varies depending on location by up to $3,598 per month. Fees might reach $7,048 in some parts of the state, but they remain around $3,450 in some areas.

Cost vs Quality of Care

Families shouldn't just choose the cheapest assisted living community available in an attempt to save money. Doing so could lead to your loved one not receiving the care they need.

Instead, focus on finding a community that offers good value for the money you're spending. You want to work with compassionate caregivers who have extensive experience helping seniors with mobility issues and cognitive decline.

It's important to look into the background of community employees to make an informed decision.

You also should look into additional services and amenities in each potential retirement community. You'll get more bang for your buck when you choose a community that offers:

• Accessibility features in all areas
• Activities and clubs for community members
• Special events like musical performances and guest talks
• Chef-prepared meals
• Health and wellness programs

This will ensure that your loved one experiences the highest possible quality of life.

Additionally, consider some factors that influence elder care costs. Prices may fluctuate depending on your loved one's:

• Level of care
• Apartment floor plan
• Guest accommodations

Do your research and figure out what amenities are most important to you. Cut costs on those that are less important.

Options for Senior Care Financing

Out-of-pocket payments are usually at the forefront of paying for assisted living. Some of this money will come from:

• Long-term savings accounts
• Checking accounts
• Money in pension accounts
• Social security income

This may sound like a huge burden, but there are other sources of personal funding you likely haven't thought about yet!

Many people fund assisted living with the money gained from liquidating the new resident's assets. After all, the person moving into a senior care community will no longer live in their old home. They also won't need their personal vehicle or furniture.

Selling houses and belongings can put some extra money in your pocket to decrease the burden of assisted living costs.

Loans for Elder Care Expenses

There are also two core types of loans that families can take out for elder care expenses.

Bridge loans serve as a source of financial aid for seniors who used to be homeowners. These bridge loans traditionally use the equity of the seller's old home as a down payment for a new one.

The borrower carries the financial burden of both properties for a time until they sell the old home. Once the old home is sold, the seller can use those proceeds to pay off the bridge loan.

However, some bridge loans are especially made for those moving into assisted living. If your loved one needs to make the transition sooner than they can sell their old home, a bridge loan may help your family finance assisted living during the interval when you're getting offers and making the sale.

The other type of assisted living loan is a specialized loan meant to pay for senior care.

You go to a banking or credit institution and take out the money you need to pay for rent at the senior living community. The sum you access will depend on your income and credit history.

You'll pay the loan back eventually, but it will give you the money needed to fund assisted living right now.

Long-Term Care Insurance

The National Council of Aging outlines a LTC insurance program meant to help families with elder care expenses.

There are two types of LTC insurance available. The main one is called traditional LTC insurance. This standalone insurance policy offers coverage for some senior community costs in exchange for a monthly premium.

This premium will depend on several factors, including:

• What you need to be covered
• The terms outlined in the specific policy you choose
• The entity you purchase LTC from
• How far before making the transition to assisted living you purchase your policy

It's best to invest in LTC insurance early. If you buy a policy now despite not needing to make the transition yet, you may get a lower premium rate.

This lower sum will carry on without changing as your loved one moves into assisted living. If you bought the same policy after they'd already moved, the premium might be significantly higher.

The same applies to hybrid long-term care insurance. This insurance offers the same coverage as traditional LTC insurance policies. However, it combines these benefits with either permanent life insurance or an annuity.

Once the policyholder passes away, family members can get a return of their premium. This might decrease financial stress in the future, especially during an emotionally painful time.

Get the Best Services for Your Assisted Living Costs

Paying for assisted living may sound daunting and overwhelming, but there are options available to lessen the burden on families. Now that you know what to consider when determining elder care expenses, it's time to look into financing options in more detail.

The Watermark at Napa Valley is excited to know every resident as an individual and provide personally tailored care to our seniors. We also pride ourselves on communicating with California families about long-term care payment options and financial aid for seniors.

Contact us to discuss payments before scheduling a tour of our community in Napa, CA.