Exploring senior living options for your loved one and understanding the costs involved can feel overwhelming. According to a survey by the National Center for Assisted Living, the national median cost of assisted living was $6,200 per month and $74,400 per year in 2025. Keep in mind that costs vary widely based on location, type of care, and the level of services and amenities that best suit your loved one’s needs. We’re here to help answer some of the most common questions about financing your retirement years.
What Financial Assistance Is Available?
U.S. wartime veterans and their surviving spouses may qualify for the Veteran’s Aid & Attendance benefit, which can help cover the costs of assisted living or nursing care in addition to a veteran’s regular pension. While most veterans in need of assistance qualify, some restrictions do apply. We also recommend allowing plenty of time for the application process.
Does long-term care (LTC) insurance cover assisted living costs?
Depending on the policy, long-term care insurance benefits can be applied to assisted living care and/or nursing home costs. Be aware that premiums can be high and increase with age and poor health, so experts recommend that individuals begin planning between ages 52 and 64.
Does Medicare cover assisted living costs?
Families are often surprised to learn that Medicare does not cover assisted living costs outside of 100 days of rehabilitative care or skilled services for a qualified stay. Medicare Part A covers hospital stays, short stays in a nursing home for certain illnesses and hospice care in the last six months of life, after a standard yearly deductible.
Are there other ways to pay?
Many families’ first option is to pay assisted living costs with the proceeds from the sale of their loved one’s home, but they may also consider other options, such as renting the house or using it to qualify for specialized loans.
A bridge loan is a good option for families who need funds right away while waiting for a home to sell. These interest-only loans draw on the home’s equity to cover senior living expenses. In the meantime, once the home sells, the proceeds pay off the loan.
For seniors with funds invested in a life insurance policy, “accelerated” or “living” benefits may provide financial relief sooner than expected. Through this option, the original insurance company repurchases the policy for 50 to 75 percent of its face value. Alternatively, a life insurance conversion program, sometimes called a “life assurance” benefit, allows seniors to convert a life insurance policy directly into long-term care payments.
While working through the financial aspects of paying for assisted living can be challenging, The Palms is here to help. Contact us, and we can help you create a financial plan that works for you or your loved one.
