How to Prepare Financially for Assisted Living


For the elderly and those at risk for experiencing disability, being admitted to an assisted living facility can be a real possibility. While it’s often necessary, it’s also unfortunately quite expensive, costing a minimum of tens of thousands of dollars a year. If you feel as if assisted living will be a major component of your future, then here’s some advice on how to be financially prepared for it.

Think Long Ahead, If Possible

No matter how financially successful you are, the cost of assisted living can add up fast and you might end up in dire circumstances if you don’t prepare properly. Whether you’re right around the cusp of retirement age or have actively entered it, it’s important to get your finances in order to face the financial brunt.

Cutting down on spending, making the right investments, and shifting your finances to the right place should be something done years, if not decades, in advance of being placed in an assisted living facility.

If you’re relatively young, then you should seriously consider making learning about assisted living requirements and researching living arrangements a priority in your retirement planning.

Look Into All The Resources Available for Assisted Living

Even with being financially prepared, most people will find it extremely difficult to afford assisted living costs. Fortunately, there are many programs out there that provide individuals with the resources necessary for paying high medical bills. Medicare and Medicaid are insurance programs most people know about and while a decent number of people won’t qualify for them due to age or wealth restrictions, most people can reasonably gain access to them and make them a vital part of their financial planning strategy. Medicare covers many aspects of living assistance associated with physical rehabilitation and the administration of medication; however, most expenditures at facilities are ultimately covered by Medicaid, so focusing on that form of insurance should be a priority.

If you’re a military veteran, there are also many VA benefits that apply to assisted living care, which would be a good additional resource.

Leverage Any Real Estate You Own

If you own a home, it’s likely to be the most valuable asset you have and you’ve probably invested a great deal into your home’s equity. When it comes to affording assisted living care, your home’s value can be tremendously useful, although it’s also possible owning a home can have the opposite effect.

If you still have to pay a mortgage, property taxes, and homeowner’s insurance, it might be worth it to sell your home, move into a small apartment, and invest the money you made from the sale into a fund in order to improve your financial situation.

Alternatively, it might be a good idea to simply sell your home directly before you move into an assisted living facility or perhaps even get a reverse mortgage on your property; that way you’ll be financially prepared when you’re officially retired.

Long-Term Care Insurance

Although it’s not ideal and many people don’t consider it, disability is something that can potentially affect anyone. That’s why there is a multitude of long-term care insurance options available. Long-term care insurance is a type of insurance that pays completely, or in part, someone’s assisted living care in the event that they become disabled, with a particular emphasis on people who require long-term care during retirement. With the right policy, the coverage this insurance provides can allow for a substantial amount of breathing room when figuring out how to pay for care. It should be noted, however, that long-term care policies can be precarious, with lots of technical requirements that need to be met in order for insurance companies to pay for assisted living.


Assisted living care is extremely expensive. Some options are more affordable than others, but ultimately, it’s going to be a very substantial financial challenge one way or another. Thinking in advance and planning for retirement and how you’re going to afford care is going to be an absolute necessity to make the whole process as smooth as possible. Leveraging all the assets you have and developing contingency plans for financial hardship will go a long way toward helping you afford care. 


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