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Deirdre Thornlow
Deirdre ThornlowAssociate Clinical Professor, Duke University
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If you’re starting to consider senior care options for a loved one, you know the choices can be overwhelming. Choosing the right living situation depends on factors such as meeting your loved one’s needs and respecting their physical and mental health. This includes everything from cognitive ability and physical health to social aptitude and desire for independence.

There’s a lot to consider when choosing the next step in living arrangements for a loved one, including what you and your family members can afford. Finances are often a major contributing factor to the decisions that are made.

By 2030, older adults are expected to comprise 20% of the U.S. population. The good news is you don’t need to navigate the living and financial options for senior care alone. This guide will help you make these decisions by detailing the various care options available and provide insight into the financial side of senior care, so you can successfully support your loved ones' transition into their senior years.

Senior Care and Finances

Senior Care Profiles

You have many choices when it comes to senior care options. The cost of senior care depends on various factors, including insurance, the level of care, how much supervision an individual needs and geographical location.

According to Dr. Deirdre Thornlow, an associate professor at Duke University School of Nursing, determining the level of care for aging adults depends highly on their ability to complete instrumental activities of daily living (IADLs) such as bathing, grooming, eating and maintaining finances. Prices shown are for informative purposes only. Your costs will be dependent on personalized determining factors.

In-Home Care

What Is It?
An in-home caregiver checks in on one of her patients

In-home care enables older people to stay in their home while receiving the care and medical attention they may need. In-home care can include anything from daily assistance with activities such as bathing and eating to care for disease and illnesses. Examples of in-home care options include:

  • Personal Care Aides: PCAs help seniors with daily activities and provide long-term care.
  • Home Health Aides: HHAs are similar to PCAs, except they have additional training and licensing that enables them to recognize symptoms in their patients that require immediate attention.
  • Seniors Helping Seniors: This model enables seniors to stay in their homes by providing companionship and care from other seniors.
  • Aging in Place: Sometimes, the ability to remain home requires nothing more than home modifications. Organizations like the National Institute on Aging provide resources for home modifications that can keep seniors in their homes longer.
Who Is It For?

In-home senior care can be ideal for nearly anyone who can afford it. However, it might not be the best choice of long-term care for every individual. Questions to ask yourself to determine if in-home care is right for you and what level of care you’d need include:

  • What illnesses do my spouse or I have?
  • How independent do I want to be?
  • How many years of in-home care will I require?
  • Do I need help remembering to take my medications? Cooking for myself? Bathing?
  • Am I comfortable with a health care professional coming into my home to take care of me?
How Much Will It Cost?

In-home senior care costs vary greatly based on the care you’re receiving, but there are some average costs you can keep in mind.

  • Hourly: $16–28/hour.
  • Daily care: $200–350 per day.
  • Overnight care: $120–$200 for every 10- to 12-hour shift.

Nursing Home

What Is It?
A nurse visits with several nursing home residents

A nursing home provides 24-hour supervision and multiple levels of care. Services can include housing and housekeeping, medical services and personal care. Examples of nursing home care include:

  • Short-term care: For seniors who need short-term care after a medical incident, they can be in a nursing home for several days or weeks.
  • Long-term care: Care for ongoing physical or mental conditions.
  • Rehabilitation services: Assistance recovering from physical injury.
  • Alzheimer’s disease and dementia facilities: Many facilities offer special programs for those experiencing memory loss, including Alzheimer’s disease and dementia.
Who Is It For?

Nursing homes are an ideal situation for seniors who need 24-hour supervision and require continual medical, physical or mental care that would be taxing on a family member. A nursing home might be ideal for your loved one if:

  • They’ve been hospitalized multiple times for cognitive issues like confusion and memory loss or falls and injuries.
  • In-home care is not an option because of cost, privacy or independent reasons.
  • They’re suffering from an illness that requires continual medical attention.
  • It’s unsafe to leave your loved one alone for any amount of time.
How Much Will It Cost?

Nursing home costs vary by state and services required. As of 2018, state by state nursing home daily rates were between $153–$963.

Senior Co-Op

What Is It?
Members of a senior co-op enjoy some time together outdoors

Senior co-ops are communities that seniors can buy into and become a part of. The community takes care of things like maintenance, chores and home expenses while organizing different social activities.

Who Is It For?

Senior co-ops provide independent seniors a way to live conveniently and have a say in their community. These co-ops are for seniors who are mentally and physically healthy but don’t want to deal with the typical chores that come with homeownership. It’s also ideal for seniors looking to maintain an active and social lifestyle.

How Much Will It Cost?

Since you’re buying into a community, you’ll be in charge of the share costs of becoming a member of a senior co-op. These costs can range anywhere from 20%–40% of your living unit’s value. The average unit values are anywhere from $100,000 to $250,000.

Retirement Community

What Is It?
Residents of a retirement community go for a morning jog together

Retirement communities are age-restricted communities that offer housing for individuals that are usually healthy enough to care for themselves. Retirement communities can offer services like transportation, meals, community activities and socialization activities. Living options in these communities typically include:

  • Public housing, which is typically for low- to moderate-income individuals.
  • Assisted living for older people who need daily aid but do not need medical services.
  • Continuing care communities, which provide different housing and care options into which older individuals can transition.
Who Is It For?

If your loved one can take care of themselves but can't remain in their current home, a retirement community may be the right choice. Retirement communities are a good solution for seniors looking to maintain their independence but seeking the convenience of having some daily services taken care of, such as meals and transportation.

How Much Will It Cost?

The cost of retirement communities significantly varies since there are so many options available. Assisted living can cost anywhere from $1,500 to $6,000 a month, while community care facilities could range from $1,000 to $5,000. Seniors may also be able to find affordable housing at more reasonable prices.

Assisted Living

What Is It?
A caregiver and an assisted living resident enjoy a moment together

Assisted living provides housing and support for aging adults who need assistance with regular and instrumental daily living activities such as bathing, tidying up, taking medication and preparing meals. “These properties are not required to have a registered nurse on duty,” says Dr. Thornlow. “But they may offer licensed practical nursing (LPN) care and memory care units to cater to those with dementia or other cognitive limitations.”

Who Is It For?

This type of living is necessary for older people who cannot live safely on their own and who may be suffering from cognitive issues that cause them to forget to take medications or not allow them to take care of themselves properly. For individuals who may be unable to bathe or adequately feed themselves or are living with an illness or disease, assisted living can be a viable living option.

How Much Will It Cost?

Assisted living costs can range from $1,500 to $6,500 a month, depending on the location and services offered. Most facilities offer the ability to pay for additional levels of care and services as needed.

Adult Day Care

What Is It?
Seniors enjoy a game of cards at adult day care

Designed for seniors who need supervision and assistance throughout the day, adult day care is exactly like it sounds. Services provided can include the following:

  • Counseling
  • Education
  • Evening care
  • Exercise
  • Health screening
  • Meals
  • Medical care
  • Physical therapy
  • Recreation
  • Respite care
  • Socialization
  • Supervision
  • Transportation
  • Medication management
Who Is It For?

Adult day care provides relief for families who have loved ones that require supervision during the day but do not need to be in a full-time care environment. For seniors looking to maintain their independence and social lifestyle, adult day care offers that opportunity. Seniors considering adult day care should be in good health mentally and physically and not require daily medical care.

How Much Will It Cost?

Costs will vary depending on location and services offered but are usually between $25 to $100 a day.

Hospice

What Is It?
Adult children visit with their father, who is in hospice care

Hospice is end-of-life care for those with terminal illnesses or nearing their final days. Hospice care can be offered at nearly any location, including a home, nursing facility, assisted living facility or hospital. The goal of hospice care is to help the patient be as comfortable as possible in their final days.

Who Is It For?

Hospice is end-of-life care for those with terminal illnesses or nearing their final days. Hospice care can be offered at nearly any location, including a home, nursing facility, assisted living facility or hospital. Hospice care's goal is to help patients be as comfortable as possible in their final days.

How Much Will It Cost?

Depending on the level of hospice care, location and length, care can cost anywhere from $150 a day to $500 a day.

How to Pay for Senior Care

A senior couple enjoys a walk on the beach

Understanding your senior care options is crucial in choosing the best situation for yourself or a loved one. Still, it's vital you also appreciate the options for paying for these services. There are just as many ways to pay for senior care as there are options for senior living.


MedicareThis is an icon

Medicare is a federal health insurance program for people ages 65 and up and those with certain disabilities. Medicare includes hospital insurance, medical insurance and prescription drug coverage, all of which cover specific services.

  • Hospital insurance: This includes inpatient hospital stays, nursing facilities, hospice care and some health care.
  • Medical insurance: Includes doctor services, outpatient care, medical supplies and preventative services.
  • Prescription drug coverage: Covers the cost of prescription drugs.

Medicare might be right for you if you have short-term medical needs. If you’re facing long-term care, you’ll want to seek alternative options, because Medicare does not typically pay for it.

MedicaidThis is an icon

Medicaid is a state and federally funded program that provides long-term health care coverage to those with a low income. Usually, you must be 65 or over, have a permanent disability, be a U.S. citizen, reside in the state where you apply for benefits and have a social security number to qualify for Medicaid. Income limits are set on a state-by-state basis and are based on poverty level determinations.

Medicaid might be right for you if you have limited financial means and need long-term care.

Long-Term Care InsuranceThis is an icon

Long-term care insurance is designated to pay for expenses associated with long-term care. Care for the long term can include nursing home care, in-home care, hospice care, respite care, Alzheimer’s care or adult daycare.

Long-term care insurance might be right for you if you don’t qualify for Medicaid but don’t want to pay for your medical care out of pocket. You can obtain long-term care insurance through an insurance agent or company.

Life-Insurance and Life SettlementsThis is an icon

Life insurance is purchased to financially protect dependents and loved ones upon the death of the policyholder. Life insurance can be a source of replacing lost retirement income for seniors, paying off debt when a spouse dies or paying estate taxes. There are also several options for cashing in on a policy before a policyholder dies.

  • Life settlements: When you sell your life insurance policy to a third party for cash.
  • Accelerated death benefits: When you’re facing a terminal illness and collect a portion of your life insurance policy before you pass away.

Life insurance might be right for you if you don’t want to leave your loved ones with a heaping pile of bills when you pass. It can also provide added cash in your senior years.

Reverse MortgageThis is an icon

Reverse mortgages are insured by the Federal Housing Administration (FHA) and allow you to turn your home’s equity into cash. The amount of money you receive depends on your age, your home's value, interest rates and if you still owe on your mortgage.

When it comes to senior care, a reverse mortgage won’t do much more than putting some extra cash in your pocket. However, it might be the right choice for you if you’re over 62 and need money to pay for care or other expenses.

Hybrid AnnuitiesThis is an icon

A hybrid annuity combines long-term care within an annuity where you make a series of payments or a single payment to an insurance company for a fixed annuity that includes a long-term care rider. As a result, you’ll receive monthly income spread out over a certain number of years or for the rest of your life.

Annuities are purchased from insurance companies. A hybrid annuity might be right for you if you want a predictable and guaranteed income source in your future.

Out of PocketThis is an icon

Paying for senior care out of pocket means that you pay for all of your bills, medical needs and long-term care straight from your personal funds. Paying out of pocket can only work if you have a large amount of cash on hand. Keep in mind that long-term care can start at any age and cost hundreds of thousands of dollars a year.

Buy-insThis is an icon

Buy-ins or continuing care retirement communities (CCRCs) are communities composed of apartments, town houses or condominiums designed to provide a mostly independent lifestyle to seniors with health care options if needed. For an entry fee deposit, you can “buy-in” to a community that allows you to live in the offered housing for lower monthly fees and reduced monthly maintenance costs and other services.

A buy-in might be right for you if you have a decent amount of money and want to continue to live in an independent residence but not worry about the maintenance of a home. They’re also ideal for individuals who eventually transition into needing more levels of health care that are offered within the community.

Financial Assistance Programs

A nurse discusses care options with a senior couple

While there are many ways to pay for senior care, the costs can add up quickly. Fidelity Investments estimates that an average senior couple will spend $295,000 for health care expenses during their retirement. Fortunately, various senior care financial assistance programs are designed to help ease the burden of paying for senior care.

Medicare & Medicaid: By far, the most common financial assistance programs for senior care is Medicare and Medicaid. If you qualify for both, a majority of your health care costs will be paid. Medicare is aimed to assist individuals no matter their income, while Medicaid is designed for low-income seniors.

Area Agency on Aging (AAA): A network of more than 620 non-profit organizations nationwide that provide a variety of services to older people, including nutrition, caregiver support, care management, insurance counseling and transportation, to name a few. AAAs serve specific counties.

Senior Health Insurance Assistance Program (SHIP): This program offers specialists that can help seniors understand their health insurance benefits and different plans and coverage that may be available to them. SHIP will help you find a specialist in your area with which to work.

State Assistive Technology Programs: Funded by the Assistive Technology Act, all 50 U.S. states are provided with the resources and funding to help the elderly access necessary assistive technology. Every state is different, but nearly every one consists of the following components: device and equipment loan programs, recycling and exchange programs and low-interest loans and grants.

Veterans Aid and Attendance: Certain veterans qualify for several financial relief programs offered through the VA. These programs include long-term care at home or in a nursing facility, assisted-living centers and adult day care centers. The VA also offers several different pension options to help pay for long-term care.

Senior Care and COVID-19

A caregiver and a senior both wear masks as the caregiver helps the senior with her daily exercises

Older Americans who have underlying medical conditions are at higher risk of contracting COVID-19. When choosing senior care for a loved one, it’s essential to thoroughly vet your options to understand the coronavirus's potential risk and how the facility is handling cases that may break out in their building. When speaking with potential care providers, keep an eye on the following and ask these crucial questions.

  • How the facility maintains cleanliness of the facility and patients.
  • Whether the facility is practicing social distancing and requiring protective gear such as masks.
  • How many staff interact with a patient at a time. The more people who interact with each other, the more likely someone is to contract COVID-19.
  • Determine if the facility has had any COVID-19 cases and the steps they took to control the virus's spread.
  • Try and get a general sense of the risk of your loved one contracting COVID-19. Seniors living in nursing homes and assisted-living facilities are more likely to contract the coronavirus because of residents' close proximity to each other.

Essential questions to ask:

  • Has anyone in the facility tested positive for COVID-19?
  • What are you doing to prevent infection?
  • How often are you conducting health screenings?
  • What is your communication plan for keeping patients and families up-to-date on the coronavirus status in your facility?
  • If a patient gets sick, or there is an outbreak in your facility, what type of medical care can your facility provide?
  • What is your emergency operations plan?
  • What are your visitation rules?
  • What should I do if my loved one tests positive for COVID-19?
  • What support do you offer for patients who have dementia or Alzheimer’s disease?

Insight From a Senior Care Expert

  1. What signs should people look out for in determining when their aging parents need additional care?

    The ability to live independently hinges on their ability to remain safe within their home. The ability of older people to complete their activities of daily living (ADLs), like bathing, grooming and eating, is fundamental to their ability to live independently.

    Furthermore, the ability to complete instrumental activities of daily living (IADLs) is also essential to remain in their own home. IADLs range from cooking and cleaning to shopping and maintaining their finances and paying bills. Once these IADLs become somewhat challenging to manage, you’ll need to investigate the available resources within their community that can offer support. If it becomes clear that an older loved one cannot live safely independently, it might be time to consider an assisted living option.

  2. What age should people expect to start needing/paying for senior care?

    Aging may be chronological in nature, but the experience is as varied as the individual. In other words, some people may need care in their mid-60s, whereas others can live independently well into their 80s. It should be noted that less than 5% of older adults live in institutionalized settings. This proportion increases as one ages, of course. For example, only 1% of adults age 65–74 live in a long-term care setting, 3% of adults age 75–84 live in these institutions and this proportion increases to 11% for adults 85 years and older. Given these statistics, however, you can see that most older adults continue to live in their communities.

  3. What's one thing that people usually overlook when planning for senior care for their parents?

    Again, only 5% of older adults live in an institutional setting. The vast majority live in the community. When preparing to care for aging parents, consider and research the available resources right in their community. Research the medical services, grocery and meal delivery services and transportation options, and determine where the nearest senior center is located. These community centers often have daily programs for older adults and provide a wonderful outlet for social connection.

    Convincing your parents to attend these centers can be challenging, as you might hear them say, “I don’t want to sit around with a bunch of old people all day.” Encourage a visit so they can see for themselves the educational offerings and opportunities to engage with others. Social isolation and the loss of friends over the years lead to depression in older adults, so keeping them engaged and active can help.

  4. What else should children talk about with their parents regarding senior care before they’re in their seniors years?

    Another subject that you’ll want to broach with your aging parents includes discussing their wishes should they become ill and unable to advocate for themselves. Securing advance directives and documents such as the Five Wishes can help you begin to have those discussions. Other documents that serve to ensure end-of-life and care decisions are acted upon include the portable medical orders for scope of treatment (MOST) forms and assigning a health care power of attorney.

  5. What is the biggest challenge that families/seniors face when finding and paying for care?

    The biggest challenge is determining the amount of funds available, the types of services that may be necessary and which family member will be responsible for overseeing the distribution of funds. Some siblings may share some of the financial expenses that remain uncovered from their parent’s funds, and others may share caregiving duties. Disagreements can ensue, which is why planning early while parents are still able to participate in the decision-making can make all the difference.


Deirdre Thornlow
Deirdre ThornlowAssociate Clinical Professor, Duke University

Resources for Senior Care

When it comes to senior care, there are many resources available to help. According to Dr. Thornlow, it’s never too early to start planning for care. “Usually, around retirement age, people are ready to discuss options and begin planning for the next phase of their lives. Include your parents in these discussions to preserve their autonomy.” When you do start planning, you can use these additional resources to assist in the process.

Administration for Community Living
Created by the U.S. Department of Health and Human Services, the ACL combines the efforts of the Administration on Aging (AoA), the Administration on Intellectual Development Disabilities (AIDD) and the HHS Office on Disability to help increase access to community support and resources for aging adults.

Alzheimers.gov
Unbiased and comprehensive information regarding Alzheimer's disease.

Americans With Disabilities Act National Network
Resources and information on the regulations granting universal access to the disabled.

Consumer Finance Protection Bureau
Guides and resources for managing the finances of an aging loved one.

Elder Justice
Resources to help respond and prevent the abuse of older people.

FDA Tips for Seniors
Tips and resources for seniors on safe medication use.

Health Insurance Portability and Accountability Act
Information regarding medical information privacy laws and how to ensure you can access your loved ones’ medical records as they age.

Nursing Home Compare
A detailed list of the past performance of every Medicare and Medicaid certified nursing home in the country.

Supplemental Social Security Income
Information on benefits paid for aging adults with disabilities who have limited income and resources.

U.S. Department of Veteran Affairs
The official website for the Veteran Affairs department providing resources and guides for aging veterans.

About the Author


Sara East is a freelance writer and content marketing professional based in Reno, Nevada. She specializes in content on insurance, mortgage, business and travel.


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