Whether you’ve lost your income because of the death of a spouse, high medical expenses, you don’t have enough saved up in retirement funds or another life-changing reason that puts you in a vulnerable financial position, you may not be able to afford high-end, luxury senior living or continuing care retirement housing with hefty entrance fees.
Thankfully, there are budget-friendly independent living options for those struggling to afford their residence, including income-based senior living options.
“It’s not all about the affordability of a community,” says H. Francis Reaves, an elder law attorney and founder of Parent Your Parents, a senior concierge services firm based in Miami. “Instead, it’s much more about community and support. Many of these facilities provide belonging, as well as access to activities, health care services and daily assistance for independent living.”
For seniors who don’t have much money, this type of facility may be a good option for aging well and staying in their local community.
“Affordable housing for seniors is probably one of the most critical services for seniors at this time,” says Karla Radka, president and CEO of Senior Resource Alliance, an aging and disability resource center based in central Florida.
[READ: 7 Signs It’s Time to Move to a Senior Living Facility]
What Is Income-Based Senior Living?
Income-based senior living is housing designed for older adults based on their annual income. It is often subsidized through a government program to make it more affordable for those on fixed incomes.
“Income-based senior living can be a great solution for older adults seeking affordable housing … (and) ensure that they have access to safe and supportive housing,” says Debbi Incopero, senior vice president and senior living practice leader at Marsh McLennan Agency, the U.S.-based, middle-market brokerage of global insurance brokerage Marsh.
[READ Senior Home Care: Services, Costs and Tips for Aging in Place]
Who Is Income-Based Senior Housing For?
Lower-cost housing is designed to support people in a variety of situations, including:
— Low-income seniors who are relying on fixed incomes, generally retirees depending on Social Security or minimal wages
— Disabled seniors facing extra financial burdens
— Single seniors living alone who are struggling with housing costs
— Seniors in transition moving from homeownership or dealing with recent hardship
“While individual age requirements vary by location and program, minimum age is typically 55 to 62 years,” Incopero says.
[READ: How to Choose the Right Senior Living Facility: A Checklist]
Low-Income Senior Living Options to Consider
A wide variety of senior living facilities and communities may offer income-based options, including:
— Independent living communities
— Public housing developments
How Much Does Low-Income Senior Living Cost?
While low-income senior housing is designed to support people who don’t have much money, that doesn’t mean it’s free, and not everyone qualifies for it.
“This type of housing typically has lower rent prices and stricter eligibility requirements than other types of affordable housing,” explains Brandon Blakeley, a senior care specialist and co-founder of senior living platform Mirador.
The prices for income-based senior living vary widely based on several factors, including:
— Location
— Size of rental unit
— Local regulations and programs
— Level of care needed
Rent is usually calculated as a percentage of the individual’s income. This is usually 30%, which makes it more manageable for those on fixed income.
For low-income individuals, this can mean the rent you’ll pay is significantly lower than market rate in the area where you live, but the monthly cost can still vary widely depending on location and type of facility.
For example, Incopero notes that various housing options can range from:
— Independent living: $500 to $3,000 per month
— Assisted living: $1,500 to $5,000 per month
— Nursing home care: $5,000 to $11,000 per month, with some income-based options available
Many of these residences receive or accept local or federal government subsidies or waivers to offer lower cost housing to seniors in need. This support comes from a variety of sources, including:
— Section 8 housing vouchers
— Low-income housing tax credits
— Section 202 supportive housing subsidies
— Project rental assistance contract (PRAC)
— Medicaid
— Project-based housing choice voucher programs
How Can I Qualify for Low-Income Senior Living?
Income limits to qualify for low-income senior housing vary by state but are typically calculated based on the median income for the county or metropolitan area where you live.
The U.S. Department of Housing and Urban Development (HUD) determines and updates the Area Median Income (AMI) annually. The three levels of AMI based on income are:
— Very low income: At or below 50% AMI
— Low income: At or below 80% AMI
— Moderate income: At or below 120% AMI
Proving that your income is low enough for this type of housing can be a complex process. Each state has its own process for screening for eligibility, which means looking at your income and assets. In some states, food stamps, rental subsidies, your vehicle and gifts may be counted as income, reducing your chances of being able to secure supportive, affordable housing.
In addition, the waiting list can be very lengthy and is not necessarily open year-round. Because of this limited availability, you may not have complete control over where you end up; waiting lists and current availability can delay your move-in date or limit your options.
How Can I Pay for Assisted Living With No Money?
Radka notes that most people pay for low-income housing in the same ways other seniors pay for their living arrangement. These can include:
— Personal savings
— Retirement accounts
— Pension payments
— Social Security income
— Proceeds from the sale of the family home
— Other private funds, such as a loan from a relative
Medicare, the federal health insurance program designed for adults over age 65 and certain younger individuals with qualifying disabilities, doesn’t pay for income-based senior living. But Medicaid, the state-administered health insurance program for low-income individuals, may be able to help in some situations.
“All communities have programs in which you can stitch together a low-income housing situation,” Reaves says, adding that most of them are Medicaid-based.
The Program of All-Inclusive Care for the Elderly (PACE), a Medicare and Medicaid program available in 33 states across the U.S., helps people meet their health care needs in the community instead of going to a nursing home or other care facility. PACE is part of the Medicaid Advantage Program, which covers health costs and provides a housing allowance for certain individuals who qualify for Medicaid.
“This allows a senior to stay in their home and have a home health aide stop by two or three times a week to care for elderly people who cannot care for themselves,” Reaves says.
PACE uses a 1 to 5 scale to rate how ill a person is and places them on a list for in-home services.
“The sicker you are, the closer to the front of the line you’re placed,” Reaves says.
Affordable Assisted Living Services to Keep Cost Low
Assisted living can be very expensive. Genworth Financial’s 2023 Cost of Care Survey reports that the average monthly cost of an assisted living facility in the U.S. is $5,350. Unfortunately, that’s beyond reach for many seniors.
While the easiest way to keep assisted living costs low is by remaining at home as long as possible, where you can receive the care and assistance you need from family caregivers or a home health aide a few days a week, these expenses can vary widely depending on location, level of care needed and other factors.
Other ways to pay for care if you don’t have a large pool of savings include:
— Life insurance policies. Some policies can be cashed in early for a lump sum and then used for living expenses and health care costs in assisted living communities.
— Long-term care insurance. This type of insurance is specifically designed to help with health care expenses later in life and works best when it’s purchased earlier in life, but there can be limitations depending on the plan.
— Reverse mortgage. For some seniors, selling their home back to the bank in installments with a reverse mortgage can free up working capital to pay for care.
— Veterans benefits. Veterans and their families may qualify for certain benefits that can help cover the cost of assisted living.
How to Find the Best Income-Based Senior Housing Near Me?
While low-income housing can be a great solution for seniors who need help making ends meet, the demand outstrips the supply of affordable units, Radka says.
However, availability varies from town to town. You can start your search with U.S. News’ Best Senior Living Communities 2024 ranking for facilities near you that might have some affordable units for rent.
Virtually every community has local resources and experts who can help you find affordable housing near you. Contact your town’s senior center or your local Area Agency on Aging for resources in your community.
In addition, the following nationwide resources may help as you navigate the senior housing landscape:
— The HUD website. This executive department of the federal government supports community development and works to increase access to affordable housing free from discrimination. The website provides a wide range of information and resources to help you find your way to an affordable home.
— The HUD hotline. Dialing 1-800-569-4287 will connect you with a local HUD-approved housing counseling agency that offers low or no-cost rental housing consultations.
— Local public housing agency. HUD also offers an online public housing search feature where you can find public housing options and resources in your state.
— The HOPE Hotline. Offered by the Homeownership Preservation Foundation and GreenPath, two national nonprofits that support sustainable homeownership, you can call 1-888-995-HOPE (4673) to access free renter counseling and education that’s tailored for people struggling with housing concerns.
Consult with a social worker or senior care advisor who can help lead you to options that fit your needs where you are located.
Before you decide, be sure to tour any senior living facilities you’re considering and talk with the present residents to help you get a sense of what it’s like. You should also look for a place that adds to your quality of life, rather than one that’s simply a place to pass your days.
More from U.S. News
How to Pay for a Nursing Home With No Money
A Guide to Senior Apartments and Where to Find Them
What Is Medicaid Spend Down? Everything You Need to Know
Low-Income Assisted Living Options originally appeared on usnews.com
