Evaluate the Cost of Assisted Living
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Now the big question for your long term care plans! How much does assisted living cost? And no surprise, this question is not easy to answer. But it’s important, because you or your family will have to pay most of the costs of assisted living. There are two big costs to consider: the entry fee and monthly costs. Here is a brief description of each:
Entry fee: The entry fee is the upfront cost of admission. This cost varies considerably across the country and by type of apartment or unit and other factors. A starting point may be $100,000, but this fee can be much higher. Many people use the proceeds from the sale of their homes to finance the entry fee.
Monthly fee: Monthly fees fall into a range, but on average the cost of assisted living currently is around $3,500 a month, or $42,000 a year. Genworth Financial, Inc., an insurance holding company, conducts an annual comprehensive survey of assisted-living costs.
In 2013, Genworth found that the national median rate for a one-bedroom, single-occupancy facility was $41,400 a year, a five-year cost increase of 4.26 percent. A 2012 MetLife Mature Market Institute survey came up with a similar number — $42,600 a year.
The median figure, of course, includes both higher and lower rates. For example, in the Genworth survey the annual cost of assisted living in Georgia was $32,430; in Texas, $40,035; in Washington State, $51,000; and in Alaska, $72,000. (Everything is more expensive in Alaska and Hawaii.)
Assisted living is largely private pay, meaning that you have to come up with the money on your own. Some specific services are exceptions, and long-term care insurance may cover some costs. You may be able to obtain some financial assistance. But for the most part, your own dollars will pay for assisted living. Some portion of the fees may be tax-deductible, so check with your accountant.