The Cost of In-Home Care Versus Senior Community Living

Posted by in Research, Personal Finance.

Many seniors have waited years — and maybe even decades — to enjoy their retirement. Often, retirement brings people the joy learning new things, catching up with friends, more family time and taking time out for yourself.

For some, those joys mainly take place in their home, while others prefer enjoying their senior years in communities.

Although there are plenty of aspects that go into the decision of staying at home or moving to a senior living community, cost is perhaps one of the most important to compare. For those who prefer to stay in their house, the burden of paying the mortgage, maintaining the property, medical treatment, along with typical costs such as groceries and activities can start to take a financial toll. 

Due to these financial concerns as well as lifestyle preferences, some seniors may opt to leave their homes and move into a senior living community. While these communities allow residents to remain active, socialize, and get care in a safe environment, the cost structure and finances that go along with the move may be difficult to compare to the costs of living at home.  

To help those who are considering a senior living community for themselves or for a loved one, a breakdown of costs for each is summarized below. This guide is meant to help those comparing the finances between living at home, receiving in-home care, and community living.

Cost of Living at Home

AARP reports that nearly 90% of seniors want to stay in their homes for as long as they can. A person’s house offers familiarity and memories, but as we age, living at home might not be the best option, physically or financially.

For instance, taking care of a home and its surrounding property often requires physical work. Even for seniors who are relatively healthy and capable of living alone, doing yard work, regular cleaning, laundry, and home maintenance can become a burden. Often, these tasks become additional monthly expenses as caretakers are hired to perform them. On average, seniors can already be responsible for the following basic monthly costs when living at home:

  • Mortgage or Rent: The median mortgage payment in the U.S. is $1,030, according to the most recent American Housing Survey from the U.S. Census Bureau. For those who opt to rent, the average rent for a one-bedroom apartment is $955, according to research by Apartment List.
  • Home or Renter’s Insurance: The average monthly cost of home insurance is $90, according to Lending Tree, while renter’s insurance costs an average of $16 a month, according to the Insurance Information Institute.
  • Utilities: The monthly cost of utilities can range for seniors depending on their usage, the time of year and where they live. On average, seniors can expect to pay the following according to information compiled by Move.com:
    • Electricity: $183
    • Gas: $82
    • Trash and Recycling: $10-$40
    • Water: $40
  • Internet, Telephone and Cable: Seniors will pay about $165 a month for a landline phone, internet and cable package, according to research by Mintel.

These standard expenses to operate a home can cost seniors between $1,451 -$1,630 each month, before including other essentials such as food and transportation.

The monthly average for groceries, transportation and other necessities is as follows:

Adding these essentials, a senior’s cost of living at home increases to between $2,591 and $2,795 each month.

In addition to these typical home-owners expenses, seniors might also need the following services, depending on their health and the status of their home:

  • Maintenance and home repairs
  • Security system
  • Laundry services
  • Health and wellness
  • Emergency call service
  • Fitness club membership

Including these services can bring a senior’s monthly living expenses to over $3,000.

Cost of In-Home Care

The Pew Research Center found that 61% of adults surveyed over the age of 65 said they preferred to stay in their home and have someone care for them if they were no longer able to live on their own.

While having in-home care can allow seniors to remain in familiar surroundings, it can also be expensive. Seniors who opt for in-home care must consider the medical cost in addition to standard at-home living expenses. According to the Genworth 2018 Cost of Care Study, the cost of hiring a home health aide for eight hours a day is $4,195 per month. For seniors that need part time care, the average hourly cost of a home care aide worker range from $16 an hour to $27 an hour, depending upon the geographical location. At 20 hours a week (four hours a day), the cost of in-home care ranges from $2,660 to $4,680. 

Combined with the cost of living in and maintaining the home, in-home care may bring a senior’s total expense to more than $7,000 per month. Of course, these estimates are dependant on many factors such as location, health, size of home, etc. Depending on a person’s financial situation, receiving in-home care may or may not be feasible for everyone.

Cost of Community Living

As stated previously, senior living communities are another great housing option for retirees. Senior living communities offer many benefits including a variety of services,  well appointed amenities, dining, social programming, and depending on the type of community, levels of care if the need arises.These benefits are meant to replace some concerns of at-home living such as home maintenance or knowing care is always available. 

Often, the cost of senior living communities is confusing to navigate at first as there is a lot of information to take in. According to Genworth’s 2018 Cost of Care Survey, the average cost of an assisted living community was $4,000 per month. However, this price can vary based on many factors including the level of care needed and location. Many may not know that senior living communities may offer financial assistance programs to help with expenses as well.

One of the most important things to factor in when considering a senior living community is all the benefits, services, and amenities included in the monthly cost. In addition to covering housing, food, and health care, senior living communities also offer “add-ons” that can help seniors enjoy their retirement.

Standard features of senior housing include:

  • Housing
  • Restaurant-style dining 
  • Personalized care when you need it

Some amenities and programs at community living can include*:

  • Social and recreational events
  • Health and wellness programs
  • Fitness clubs
  • Pools and spas
  • Gardening
  • Cooking classes
  •  Art and music classes

*Each community has a variety of levels of care and programs offered. Connect with a community near you for specific services and amenities.

Budgeting For the Care You Need

Making the decision of where to live can be difficult for both seniors and their families. While the choice may come down to a person’s health and finances, other factors like taking care of a home, getting quality health care and remaining active can have an impact when comparing costs. If you’re considering what it would cost to join a senior living community, you can use our financial planning tool to figure out what fits your budget.