How Much Should You Save for Future Assisted Living Costs?

Author: Sarah Williams

Reviewed By: Rachel Rose

How much you should save for future assisted living costs largely depends on your age, location, likely support needs and income. Variations make it impossible to calculate necessary savings precisely, but planning and saving as much as practical can relieve financial burdens later on.

Key Data Regarding Assisted Living

According to Genworth’s 2023 Cost of Care Survey, assisted living facilities in the United States charge a monthly median fee of $5,350. However, costs vary significantly among cities and states. The priciest states for assisted living include Hawaii, Maine and Vermont, where typical monthly fees run $9,340, $8,712 and $8,636, respectively. Conversely, Mississippi, Georgia and Alabama have some of the nation’s lowest monthly median rates of $3,800, $4,120 and $4,143, respectively.

A 2023 study found that individuals move to an assisted living facility or nursing home at an average age of 84. Additionally, the National Center for Assisted Living notes that most seniors remain in assisted living communities for about 22 months before moving to a nursing home.

Factors Influencing Saving for Assisted Living

Putting aside funds at a younger age means many people can gradually build up more savings over a longer period. However, individuals can begin saving for long-term care at any time. Accounting for income, savings and retirement accounts alongside current living costs can help people prioritize.

Crucially, when considering future costs, individuals should also account for inflation and other possible future expenses, such as insurance premiums, medical fees and personal items. Expected future income, such as Social Security and VA benefits, can also influence saving behaviors. Additionally, individuals may contemplate taking out long-term care insurance for future security. Consulting a financial advisor may provide beneficial guidance.  

Financial Help for Assisted Living

Although seniors with limited means may qualify for public assistance, such as traditional Medicaid or Home and Community-Based Services waivers, programs rarely cover room and board costs in assisted living communities. Additionally, long-term care insurance plans often have maximum payouts or duration limits. Most seniors require other private funds alongside benefits or insurance. Without the means to pay for assisted living, seniors who meet functional and financial criteria may qualify for nursing home financial aid. Although this funding covers room and board costs, including for those who need nonmedical custodial care in a nursing home, many seniors prefer the less-restrictive setting of assisted living.