It’s no secret that saving for retirement is a good idea. And for many older adults, retirement expenses often include senior living, which can be pricey. If you aren’t of retirement age, and you’re trying to figure out how to best plan, it can be hard to know where to start.
But one thing is for sure — where you live, whether in your home or in an assisted living facility or nursing home — your housing costs are likely to make up the bulk of your budget.
In this article, we’ll go through the many different types of senior living, their average costs and how to prepare financially for this stage of your life.
[Read: The Highest Medical Costs to Expect in Retirement.]
What Is the Average Monthly Cost for Senior Living?
You have many options when it comes to senior living, and each type of facility may cater to various budgets. One rule of thumb, however, is the greater the level of care, the higher your costs are likely to be. For instance, independent living, where residents largely manage their own needs, may cost significantly less than a nursing home, which provides round-the-clock care.
Below is the average cost for five different types of senior living communities, as well as in-home care for seniors aging in place, based on figures from senior care-focused organizations and experts:
| Type of Senior Living | Average Cost Per Month |
| Home health aide | $6,292 (40 hours/week) |
| Independent living and retirement communities | $3,065 |
| Assisted living | $5,900 |
| Continuing care retirement communities | $3,000 to $5,000 |
| Memory care | $8,019 |
| Nursing homes | $9,277 for a semi-private room, $10,646 for a private room |
[READ: Does Medicare Pay for Assisted Living?]
What Factors Affect the Cost of Senior Living?
The expense of senior living depends on a lot of issues, but two really stand out: housing and health care
“For most, the two most significant costs in retirement are housing and health care,” says Glen Franklin, assistant vice president of RIA and lead generation strategy and research at Jackson, a retirement services company headquartered in Lansing, Michigan.
And when it comes to housing and health care, your geographic location and the level of care you need — virtually none to having home health aides or a nursing staff watching over you — matter greatly as well.
Additional factors can cause the cost of senior living to add up, says Lauren Dunning, director of the Center for the Future of Aging at the Milken Institute, a nonpartisan think tank based in Santa Monica, California.
If you move to a senior living community, the price you pay will be based on the following factors:
— Owner/operator costs
— Location, size and property type
— Type of accommodation (single vs. shared room)
— Level of on-site medical care and assistance with activities of daily living
— The specific staffing, services and amenities available
“Staffing costs are typically the largest expense item, and can account for up to two-thirds of overall owner/operator expenses,” Dunning notes.
“Another dimension to consider is cash flows versus lump sums,” Franklin adds.
That is, some years, you may be hit with a lot of costs throughout the year, and other times, such as if you enter a nursing home, you may be hammered with a large upfront expense all at once.
“Annual health care expenses and housing costs are the most significant cash flows, followed by food and transportation,” Franklin says. “The most significant lump sum risks are long-term care and end-of-life health care expenses.”
So you need to plan ahead for all of the expenses you’ll have day-to-day, year after year, but also for expenses that may crop up if you suddenly change your life dramatically, such as entering a continuing care retirement community.
You also want to consider inflation, Franklin says. He says that a lot of people struggle to incorporate that into their planning. He says that a lot of people, even if they do remember to account for inflation, guess too low.
“For example, a 3% inflation rate seems reasonable, but it will result in prices doubling over a 24-year period. That’s less time than many will spend in retirement,” he says. “What’s more, health care expenses have historically risen at rates well above those of general consumer prices.”
Nobody knows the future — where you’ll need or want to live or what sort of health you’ll be in — so you have to try to plan for all scenarios (and ideally, remain as healthy as you can). But here are some types of scenarios you may want to consider as you do your planning.
[READ: What Is Luxury Senior Living?]
Budgeting: CCRC vs. Independent Living vs. 55+ Active Adult
Not surprisingly, if you’re a senior (generally somebody considered 55 or older) living on your own, you’re probably going to spend less than somebody living in a CCRC or in an independent living community.
Independent living is generally considering living in a retirement community but one that is marketed to seniors; you could almost argue that it’s like living in a community run by a homeowners association (but one aimed at seniors and with extra perks) because in these communities, your home maintenance, yardwork and even household chores are typically taken care of.
An active adult 55+ community is a type of independent living. It’s a residential neighborhood designed for adults aged 55 and older, offering an independent lifestyle with resort-style amenities like fitness centers, pools and clubhouses, plus organized social activities, encouraging an engaged, low-maintenance and social environment for people in similar life stages, often with lower property taxes due to fewer school-aged children.
A CCRC is a continuing care retirement community. These multi-level-care retirement communities aim to offer people the chance to age in place, where you may start off with independent living, and then later, you may move to assisted living, where a home health aide might start visiting you, to dispense medication or help you with bathing or dressing, and finally, depending on your health, you may end up in a nursing home facility on the CCRC’s grounds.
[READ: 10 Things to Look for When Touring a Senior Living Facility]
Pricing Structure Matters a Lot
If you need health care assistance, such as a health home aide to visit your home, or if you reside in an assisted living facility, you’ll want to pay attention to the pricing structure.
For instance, generally independent living communities will have a single-fee model, so while you may pay a lot to live in one — on average, $3,065 a month — it’s a fixed price. If you live in an assisted living center or a nursing home facility, you’ll likely be faced with a “levels of care” or “a la carte” pricing structure. In the senior care industry, there are generally five levels of care you’re going to be paying for, depending on what activities of daily living (ADL) you can do and other health issues you may have.
Activities of daily living refer to things we all do throughout our lives, such as bathing, using the toilet, feeding ourselves and putting on our clothes. How much help we need with our mobility is important too.
The five levels of care are generally considered to be:
— Level 1: No assistance, independent living
— Level 2: Basic or low-care needs. That might involve somebody checking in on a resident or helping them with meal prep.
— Level 3: Intermediate or medium-care needs. You probably need help with at least one ADL.
— Level 4: Advanced or high-care needs. You probably need help with several or all of your ADLs and near-constant supervision.
— Level 5: Memory care needs: Memory care and support from staff trained in dementia care.
Some senior care facilities offer a la carte services. As you might imagine, these are services you pay for, similar to choosing items off a menu. You may find that rather than receiving an all-inclusive level of care, where perhaps you’re paying for services you don’t need, you simply want somebody to do your laundry and bring you your meals, and that’s it, and maybe the math will work out better. Still, if you’re staying at a retirement community or an assisted living center, none of these services are going to be cheap.
“The high costs associated with assisted living and nursing homes often come as a surprise to families,” says Samantha McCarthy Jarvis, an estate planning and elder law attorney and founder of McCarthy Law, LLC, based out of East Greenwich, Rhode Island.
She says that too many people don’t financially plan for the healthcare aspect of retirement. “It’s very common to hear individuals say, ‘I’m never going into an assisted living facility or nursing home when I get older,'” Jarvis says.
Unfortunately, your future may have other ideas. “So many people underestimate the impact health care costs and needs can have on their retirement and overall quality of life,” Jarvis says.
[READ Signs It’s Time for Memory Care]
Senior Living Costs Per State
To see how your state compares to others, we’ve outlined the monthly average costs for different care levels — in-home health aides, assisted living and nursing homes in each state.
[CHART]
[READ 7 Ways to Reduce Health Care Costs in Retirement]
Paying for Senior Living: Financing, Sources and Programs
For many seniors, figuring out how to pay for senior living is challenging. Below are some strategies to help you prepare for this significant expense.
Plan ahead and start saving early
To pay for senior living, you’ll need a sizable nest egg to draw from. It’s best to start planning and saving for retirement and senior care expenses as early as you can.
“If you plan in advance, you can determine a roadmap of possibilities and associated costs, allowing you to maintain some level of control even as care needs increase over time,” Jarvis says.
“We plan our vacations down to minute-by-minute details, but we don’t plan how we want to age,” says Peter Ross, cofounder and CEO of Senior Helpers, a franchised service that provides at-home care for seniors. He is also the president of the Home Care Association of America’s board of directors.
The earlier you start planning, the more control you will have over your situation as you age, he says.
And you are going to want as much control, and money saved up, as possible. Franklin says that the life insurance company he works for, Jackson, has been partnering the last several years with the Center for Retirement Research at Boston College on the Security in Retirement Series. The series looks at different retirement-related risks, including healthcare, that threaten individuals’ retirement security.
Franklin says that people planning for retirement often end up making bad bets when it comes to their own retirement. “Seventy percent of individuals turning 65 each year will likely need long-term care at some point, but only 27% of individuals that were surveyed believe they will need such care,” he says.
“Additionally, the median annual cost of nursing home care in the U.S. is more than $100,000, a cost that was underestimated by over half of the pre-retirees we surveyed,” Franklin says.
[Read: Assisted Living Costs: A Guide to Expenses and Payment Options]
Financing
If you haven’t explicitly saved to pay for senior living later in life, your financing options could be limited. For example, most senior living spaces are offered as rental properties, so you generally can’t use a conventional mortgage to finance them.
However, financing tools you may be able to leverage include:
— Selling your home and using the proceeds to pay for senior living
— Taking out a bridge loan against your home to free up some cash
— Taking out a reverse mortgage and selling your home back to the bank
— Checking your eligibility for grants, waivers, subsidies and other programs
[Read: What Is a Geriatric Care Manager?]
Medicaid
While Medicare doesn’t cover the cost of senior living, Medicaid may, especially if you are looking into nursing home care.
“Many older adults who cannot afford their housing and care needs are forced to spend down their assets to qualify for Medicaid,” Dunning notes.
Sometimes, Medicaid may be your best option for paying for senior living, but there are stringent requirements to qualify. It’s best to contact an elder law attorney or another trusted advisor for guidance.
Dunning notes that some people make more money or own assets above the threshold to receive help from social programs such as Medicaid, but can’t pay for their care out-of-pocket.
This stratum of the population has been dubbed the “forgotten middle,” because they’re not wealthy enough to afford to pay for care out of their savings, but they’re too wealthy to qualify for many public aid or assistance programs.
Unfortunately, the most coveted facilities generally only accept private pay, rather than Medicare or Medicaid, according to Ross.
So, although finding a facility that accepts Medicare or Medicaid isn’t necessarily difficult, finding one you’re happy with may be more challenging.
[READ: Does Using Medicaid Affect Quality of Care in Long-Term Care Facilities?]
Long-term care insurance
Long-term care insurance, which private insurance companies sell, may cover specific senior living costs.
Still, long-term care insurance won’t cover all of the costs associated with senior living, and there might be stipulations in the policy. Be sure to read the small print of any insurance policy closely before determining whether it’s worth the cost.
[READ: Does Medicare Pay for Assisted Living?]
Private health or life insurance
Some private health insurance plans may cover certain costs associated with senior living. Additionally, some life insurance policies can be cashed in, allowing you to access a lump sum to pay for senior living. Again, you’ll need to check your policy documents closely for requirements and stipulations.
Social programs for seniors
Many older adults have limited means to pay for senior care and must consider low-cost senior living options. The following programs might be helpful to you during your search for affordable senior housing:
— PACE. The Centers for Medicare & Medicaid Services Program of All-Inclusive Care for the Elderly offers comprehensive medical and social services for qualifying elderly people, including medical and senior care benefits ranging from adult day care, home health care and dentistry services to meals and prescriptions. PACE allows seniors to remain at home rather than in a nursing home by providing medical, personal and social support services. This includes skilled nursing, personal care, therapies, transportation and even home modifications like grab bars, all coordinated by an interdisciplinary team. You must meet strict program requirements to qualify.
— SHIP. State Health Insurance Assistance Programs are offered in every state and provide unbiased help to Medicare beneficiaries and their families. Trained SHIP counselors will work with you one-on-one to find the right senior living and long-term care options.
— Veterans Affairs. For qualifying military veterans, the VA offers financial support for senior care for some individuals, their families and surviving spouses. In addition, the VA runs a network of hospitals, clinics and senior care facilities around the country that may be an option for qualifying veterans.
— Social Security Disability Insurance. The Social Security Administration’s disability insurance program provides monthly payments to people with disabilities that prevent or limit their ability to work. These funds can help pay for senior living needs, such as assisted living.
— Section 8. The U.S. Department of Housing and Urban Development Section 8 Housing Choice Voucher program helps qualifying adults 62 and older, people with disabilities and low-income families find and afford housing. Individuals involved with this program live in HUD housing and pay 30% of their adjusted gross income. However, limited slots are available, and the waiting lists can be long.
— Other options. Low-income senior housing, adult family homes and medical foster care may offer less expensive ways for seniors to get the care and support they need. The property’s location, amenities and acceptance of government subsidies as payment influence the total cost of this type of senior living.
Personal assets
Saving carefully during your working years is one of the best ways to ensure you’ll be able to afford senior living when the time comes. A variety of personal assets can come into play, including:
— Pensions, 401Ks and other retirement accounts
— Annuities and investments
— Real estate holdings
Liquidating these assets to pay for senior care can bring tax liability in some situations, so it’s best to work with a certified financial planner, tax attorney or other advisor who has experience in assisting older adults plan for their financial futures.
Types of Senior Living and Their Costs
Learn specific details regarding the level of care and cost of the following senior living options:
— Independent living
— Assisted living
— Continuing care retirement communities
— Memory care
— Nursing homes
Independent living
Independent living communities, sometimes called retirement communities, are designed for older adults who can look after themselves but want access to certain amenities, such as dining options or social activities, among peers of a similar age and level of autonomy.
The average cost of independent living is $3,065 per month. This rental fee estimate is for the property itself and often doesn’t include extras or special amenities, such as upgraded dining options or hair styling services.
Additional factors affecting cost include whether the community charges an entrance or move-in fee and whether the community is considered a luxury independent living community.
Assisted living
Assisted living is the next care level up from independent living. Residents in these facilities need ongoing support and assistance with one or more activities of daily living, such as bathing, toileting, managing medications or preparing meals.
Patrick Simasko, an elder law attorney and financial advisor at Simasko Law in Mount Clemens, Michigan, says housing and medical care are the most expensive parts of senior living.
“There are typically two parts of the cost when it comes to senior living in an assisted living facility. One is rent that includes the apartment and amenities. The other is the add-on costs for medical care, shower assisting, escorting to and from the dining room and so on. The costs for this type of care can oftentimes be exuberant and expensive,” Simasko says.
The average cost of an assisted living facility is $5,900 per month, according to Genworth and CareScout’s 2024 Cost of Care Survey (the most recent data available). This estimate includes the rent for the living space, meals and some of the support services you’ll receive, depending on how the contract is written. This monthly estimate typically does not include any health care services. Some amenities, such as medication management and incontinence help, may be billed separately.
Fees can vary based on location and the mix of services you need. For example, seniors who need lower levels of care (assistance with managing medications, for instance) may spend less than those requiring a higher level of care (more hands-on help with personal hygiene and moving around).
Continuing care retirement communities (CCRCs)
Continuing care retirement communities can address your future health care needs in a single location, eliminating the need to move to a new facility each time those needs change. For instance, most CCRCs offer independent living, assisted living, memory care and skilled nursing care on the same campus.
CCRC costs, which can be expensive, vary based on the fee model.
— An entrance-fee model CCRC usually includes an up-front fee of between $100,000 and $1 million, plus a monthly service fee, with the average fee landing at $480,000. Depending on how the CCRC’s contract is written, you may have a fixed monthly cost for your stay on campus or pay for additional services a la carte as needed.
— For a monthly rental model, the cost largely depends on how much care you’ll be needing. The nonprofit National Investment Center for Seniors Housing & Care reports an average monthly rent of $6,459 if you’re in assisted living, but if in independent living, you’ll likely pay less.
Memory care
Memory care is a type of senior living designed for people with Alzheimer’s disease and other types of dementia. Caregivers who work in memory care facilities have specialized training to assist those experiencing cognitive decline, and the facilities themselves typically have safety features to prevent wandering and eloping.
According to the National Investment Center, which follows the senior industry, the average cost of memory care is $8,238 per month.
Costs usually include the living space — an apartment or room — meals, medication management, personal care and assistance with activities of daily living, plus specialized dementia-focused support, such as reminiscence therapy. Medical care may not be included in these fees, but this can vary by facility.
Nursing homes
Nursing homes are specialized care facilities that provide round-the-clock support for older adults with medical needs.
Because nursing homes offer a high level of care on the senior living spectrum, costs tend to be higher. A semiprivate room in a nursing home costs$9,277 per month, while a private room costs $10,646 on average.
These fees include the living space, meals, assistance with the activities of daily living and skilled nursing care. Some seniors reside in nursing homes long term to manage complex or chronic medical issues. Others stay for a short time to recover after surgery or another medical problem.
Does Medicare Pay for Senior Living?
Medicare does not cover senior living costs, but it may cover some health care costs incurred while you reside in senior living.
Medicare, for instance, provides limited, specific benefits, such as:
— Short-term post-hospital rehab
— Home health care based on strict eligibility requirements
— Part-time or intermittent skilled nursing care, excluding room and board costs
Some Medicare Advantage plans may offer additional benefits.
“Many people fail to understand that Medicare and supplemental insurance plans generally do not pay for room and board at an assisted living facility or nursing home,” Jarvis says. “This often comes as a surprise, and this expense is often upwards of ten to fifteen thousand dollars per month, creating a significant financial burden and can quickly bankrupt a person or family without property planning.”
Avoiding an unpleasant surprise is why planning early is so important, according to Jarvis.
“The options are there, but many people wait until it is too late, or almost too late, when the options are far fewer, more expensive, and allow for much less control over what comes next,” Jarvis says.
More from U.S. News
10 Best Exercises for Preventing Falls in Older Adults
Medicare Grocery Allowance: What It Is and How to Get It
What to Say to Someone Who Is Dying
How to Pay for Senior Living: A 2026 Budget Comparison originally appeared on usnews.com
Update 01/16/26: This story was published at an earlier date and has been updated with new information.
