How much does independent living cost?

When considering a move into senior housing for yourself or a loved one, you might find the experience similar (and as exciting as) buying a first home. 

Choosing to live in an independent living community is more affordable than most realize when taking into consideration all of the responsibilities that are removed from day-to-day worry. However, bear in mind that there are many different types of fee structures and contracts for these types of retirement communities, making it difficult to compare apples to apples when it comes to pricing — the best way to evaluate is to compare independent living facilities based on what you are looking for and your financial situation.

If you’re an active adult ready to give up the hassles of home ownership while being guaranteed access to life-enriching amenities and the health services you may need in the future, take a look below to learn more about the cost of independent living and see if it is a viable option for you.

How Much Does It Cost to Live in Independent Living?

Independent living is for active seniors who can live on their own, require little daily assistance, and want to focus on a carefree lifestyle in a community of like-minded individuals. There is little published data on average costs because it can vary so greatly based on location, size of the floor plan, and the level of hospitality/care services provided. Despite this, you can typically expect to pay a monthly rate of about $1,000 to $6,000 plus a possible entrance fee

This monthly fee is usually all-inclusive to include items like:

  • Landscaping maintenance
  • Outings and social opportunities
  • Transportation services
  • Health and wellness programs
  • And more!

Is Assisted Living More Expensive Than Independent Living?

Generally, assisted living may indeed be more expensive than independent living. This is because an assisted living community is meant for people who cannot live on their own and need help with activities of daily living (ADLs) on a regular basis. While medical care and skilled nursing are offered by professional caregivers, they are not the sole intent of the facility. Instead, the general aim of an assisted living facility is to help the residents enjoy their lives, free from the challenges and burdens of daily life.

Because assisted living offers these readily-available medical and personal care services, this dramatically increases the price to up to $60k or more annually. Once again, this can depend on care needs and a variety of other factors. 

Coverage for Independent Living Costs

Unfortunately, most subsidized methods and government programs do not cover the cost of independent living. Find out more about this below:

Does Medicare or Medicaid Pay For Independent Living? 

Medicare generally does not cover independent living as it only pays for long-term care if the senior requires skilled services or rehabilitative care. For example, Medicare may only cover skilled in-home care services or a nursing home stay for a maximum of 100 days.  

Medicaid also does not generally cover independent living because of the qualifications associated. For instance, an individual must meet minimum state eligibility requirements in addition to having an income below a certain level. 

Does Insurance Cover Independent Living? 

Medical insurance usually does not cover staying in an independent living community because medical treatment is typically not involved in these situations. Insurance is similar to Medicare in that it may offer coverage for skilled, short-term, medically-necessary senior care, but not always. 

However, keep in mind that there is an option for long-term care insurance to cover some services. For example, if your long-term care insurance already covers the costs of someone coming into a home to do things such as prepare meals, run errands, etc., it may also cover these same types of services performed by an independent living staff. This would not cover the total costs of rent or buy-in, rather, it could still offset those costs though.

How Do Seniors Pay For Independent living?

When you can’t get elderly care covered through subsidized methods, you may need to investigate personal ways to pay. These include the following:

  • Private pay – Over the years, it can help to put a portion of earnings into your savings. You may also use a high-yield savings account, like those offered by some banks, to accumulate savings and higher interest to go toward care. 
  • Life insurance policy conversions – A person who has a life insurance policy can sell their policy to a third party in exchange for elder care services or for money that can be used towards this goal. A life insurance policyholder may also be able to cash out a life insurance policy to get a lump sum that can help with elder care costs. 
  • Reverse mortgages – A reverse mortgage is a loan available to homeowners who are 62 years of age or older who have considerable home equity. The homeowner can borrow against the value of their home and get money as a lump sum, line of credit, or fixed monthly payment and use those funds toward care needs
  • Home equity line of credit (HELOC) – Gives homeowners of any age the opportunity to borrow against their home. Furthermore, this line of credit carries a monthly obligation and operates like a credit card, enabling homeowners to make interest-only payments for the first 10 years at a variable rate. 
  • Bridge loans – A bridge loan is a line of credit with no up-front fees that enables the party who takes out the loan to pay for short-term care while they wait for other funds to arrive. Bridge loans typically have fast approval processes and charge interest on what is borrowed.
  • Drawing funding from a variety of other options –  i.e. selling off a home or piece of real estate, looking into Social Security benefits, cashing in on 401(K), IRA, stock investment, pension…etc.

Staying at Home vs. Independent Living: Should You Make the Switch?

Many people think that staying at home is cheaper than moving into a senior living community, but that’s not always the case. The total cost of living at home isn’t just your mortgage or rent—you must also include the monthly cost of food, utilities, home maintenance, property taxes, insurance, and entertainment. All of these things are included in one simple monthly bill at an independent living facility! Plus, many of these services and amenities are optional add-ons in some communities, which means you can take an a la carte approach, reducing your cost of independent living even more.

Furthermore, you need to also think about your needs changing in the future and whether or not at-home care can compensate for these issues. For example, you may need to pay for skilled professional help or make safety modifications to the home, which can all quickly add up. Independent living, however, puts you in the best possible position to make an easy transition to assisted living, skilled nursing care, memory care services, or another higher level of care.

If you are thinking about making the switch, ask yourself these questions:

  1. How much care or assistance do I need now? How much will I need in the future?
  2. As my care needs change, do I want to position myself in the best possible way in order to reduce the strain on my loved ones?
  3. Do I want to downsize my homeowner responsibilities and reduce concerns, costs, and time spent on maintenance? 
  4. Would I prefer a social and active environment that offers a variety of amenities and services?
  5. Do I have a desire to plan ahead for future housing and health care?

If you answered “yes” to any of these questions, then independent living may give you the peace of mind of a worry-free lifestyle with no unexpected expenses, chores, or maintenance. We know that it can sometimes be shocking for seniors or their family members to see the bottom line number; however, when you examine the full and total cost of living at home, you may find independent living is not only less expensive but way more simple! Find an independent living facility near you!