Pretty much everything seems to be costing more these days, and the trend isn’t likely to stop anytime soon. This has affected everything from groceries to gas – but what about assisted living for seniors? This sector has also been impacted by inflation, with some struggling to keep up with the rising cost of providing for their everyday needs. However, the story becomes more complex when you look at how these costs will likely change in 10 years.
Just like with the rest of the US, assisted living options in California are pretty varied. From retirement homes to memory care, seniors can choose the best option for their needs and budget. Seniorly’s list of San Francisco’s assisted living options can help with the search, especially for those who want to prioritize their emotional as well as physical well-being.
Why assisted living is so important for seniors and their families
We’re all familiar with the basic progression of aging, from lessening dexterity to lower energy levels. However, at a certain point these factors can get in the way of living independently. Falls and injuries can become more common, forgetfulness may be an issue, and seniors can even lose the ability to keep up with basic hygiene or house cleaning.
When this happens, there are several options to choose from. Some people move in with their families, which lets them get help with daily tasks. This is suitable for those who may struggle with day-to-day tasks, but who don’t need 24/7 care. However, it’s also a big commitment for the family members; it will change not only their daily routines, but also the way they make long-term plans for several years.
Home care vs. assisted living
Seniors can also opt for a home health care professional to take care of them. This allows them to stay at home, while also having the safety net of a qualified professional who can attend to their needs. For some people, round-the-clock care is needed; this is especially common for those with Alzheimer’s or dementia. For others, the health professional is only needed for a few hours per day. Even with a part-time carer, though, this is usually the most expensive option. California residents pay an average of $32/hour for assistance from a qualified health care professional, which is about the same as the national average. However, in some parts of the state the hourly rate can be as high as $37/hour. These areas include San Francisco, San Jose, and Santa Cruz.
This is why assisted living is usually the top choice for seniors who are on a budget, and who don’t have family members to take care of them. The average cost of assisted living in California was $5,250/month in 2021; actual prices ranged from $3,450 to $7,050. For seniors who require Memory Care (also called Alzheimer’s residential care), the cost could be up to 30% more per month.
Unpacking the NORC study on the rising costs of assisted living
The cost of assisted living is already fairly high, whether you’re considering at-home care or assisted living facilities – and it’s going to get higher over the next ten years. This probably isn’t surprising, since that’s the way things usually go. That being said, studies have indicated that several factors could combine to put assisted living out of reach for many seniors.
According to NORC researchers from the University of Chicago [mfn]https://www.norc.org/research/projects/the-forgotten-middle-in-2033.html#:~:text=A%20new%20NORC%20at%20the,and%20housing%20services%20they%20need.[/mfn], seniors will likely have a harder time paying for assisted living by 2033. In fact, they estimate that over 11 million middle-income individuals aged 75 and up may not be able to afford assisted living at all, or qualify for Medicaid that would help them with their care needs.
The situation could be worsened by the fact that future seniors aren’t as likely to be married or have families, which removes the type of support system that many of today’s seniors have. The study also indicated that about 56% of middle-income seniors will have limited mobility, and over half will have at least three chronic health conditions. For seniors under 85, about 33% of them are likely to have cognitive impairments; for those 85 and over, the number grows to 40%.
Paying for assisted living
When looking for a retirement home, memory care facility, or any other type of assisted living, the decision may come down to the size of the budget. A lot of people who end up in assisted living have spent years planning on it. They may have personal savings, retirement accounts, pension payments, or other resources to cover the cost. In some cases, their children may cover some or all of the costs associated with assisted living.
For some seniors, the plan is to sell their house and use that to pay for assisted living. This makes sense when you consider that they’ll no longer have much use for the house, but it also means getting rid of an important asset. Some people prefer to hold onto their houses as a type of rainy day fund, rather than liquidating one of their most important assets to pay for assisted living.
What many people don’t realize, though, is that they may have other options besides personal savings or selling assets. For example, a life insurance policy can be sold to a third party while still retaining some of the benefits. The policy could also be surrendered to the life insurance company in exchange for its cash value. While this does mean that the policy holder wouldn’t receive any benefits, it also means that they could have a more comfortable life at an assisted living facility.
There are also options like considering a roommate, or taking advantage of special offers. Some assisted living facilities offer discounts at certain times of the month or year, to incentivize higher move-in rates.
Even with predicted hikes in the cost of assisted living over the next ten years, seniors in 2033 will still have options. Even if they don’t have personal resources on hand to cover years’ worth of expenses, assisted living can still be within reach.