The average cost of living in an assisted living facility in 2021 was $4,500 per month (or $54,000 per year). That figure assumes that residents were the sole occupants of one-bedroom apartments. The average has grown by more than 4.65% over the last 5 years, so rising prices need to be considered when budgeting for the future.

While they are a useful benchmark, nationwide averages do not tell the whole story because the expense of assisted living varies widely by:

• geographic location,
• size and nature of the assisted living environment,
• type of accommodations (i.e., private apartment, shared room),
• range of services the senior requires,
• any amenities provided, and
• whether the facility accepts Medicaid/HUD reimbursement.

The add-on costs for services above a basic level of care can be substantial. Moreover, specialized services such as dementia or Alzheimer’s care are more costly.

Apartment Size and Quality
Nature of the Facility
Geography
Services Required
Financing for Assisted Living Care
Basic Rate Versus Extra Charges
Additional Expenses
Making a Budget

Apartment Size and Quality

Apartments in assisted living facilities typically range from studio units to one- or two-bedroom apartments. An apartment that is shared with another resident allows the residents to split the basic cost of room and board, but not all facilities permit apartments to be shared.

The size of a one-bedroom unit varies from facility to facility. Some are quite spacious while others might feel cramped to a senior who is used to living in a house. An apartment that has the space of a penthouse hotel suite will naturally cost more than a small unit.

Prices may also vary according to the quality and location of the apartment. An apartment with a nicer view, a corner unit with more windows, an apartment with a balcony or patio, or an apartment located near the elevators may be more expensive than an apartment with a less desirable view or location.

More expensive apartments tend to be more luxuriously furnished. They may have small kitchens that are not available in less expensive units. Residents looking for a more affordable option may want to look at modest apartments in assisted living facilities that are not part of a larger campus.

Nature of the Facility

Assisted living communities that offer amenities like swimming pools, fitness centers, and spa services tend to be more expensive than facilities that lack those conveniences. Similarly, communities that feature large campuses with gardens and walking paths will likely charge more than a facility that occupies a single building abutting a residential street.

Geography

The cost of assisted living depends in part upon where the assisted living facility is located. As you might expect, facilities in small towns tend to be less expensive than those that are situated in major urban areas. That is not always the case, however, as more expensive assisted living communities often take advantage of the open spaces that cannot easily be found in large cities.

In addition, the average monthly cost of an assisted living facility varies greatly from state to state. Here are a few examples, based on the results of a 2021 survey:

As you can see, while averages vary from state to state, a variety of options are available within each state to meet a variety of budgets.

Services Required

Many assisted living communities offer “tiered pricing.” The price level depends upon the nature of the services that a senior requires, as determined in the individualized service plan that the facility has prepared after assessing the senior’s needs. A senior who requires help with nearly all activities of daily living (such as bathing and dressing) will be on a more expensive tier than a senior who only wants to be freed from the burdens of housekeeping and meal preparation.

Other assisted living communities set a fee for each specific service that is required. Again, the more services the senior needs, the greater will be the monthly expense.

Tip: As you investigate various costs associated with care, be sure to inquire about fee increases, caps on rates, and how often a new fee schedule is implemented.

Financing for Assisted Living Care

Financing for Assisted Living care comes from multiple sources, but as a practical matter, the costs of paying for care at an assisted living community—the room, board and services received—are largely paid out-of-pocket. Private long-term care insurance may finance a stay in a facility and private life insurance may help, but usually covers very little.

While the federal Medicare program does not usually cover the costs of assisted living facilities (see Don’t Be Blindsided: What Medicare Won’t Cover), most states participate in a Medicaid Assisted Living waiver program that helps seniors pay for some of the personal care services that a facility provides. Although federal regulations prohibit Medicaid reimbursement for room and board in most instances, states follow a variety of policies that may limit the amount that a participating facility can charge for room and board. Since states often have enrollment caps, seniors may be placed on a waiting list before they can participate in a Medicaid Assisted Living waiver program.

In some situations, funds from other state and federal programs (including HUD and SSI) may be available to cover at least part of the cost of staying in an assisted living facility. It may be possible for a senior to apply those amounts to room-and-board. Like Medicaid, those programs tend to be “means tested” and are usually not available to seniors who have the financial resources to pay for assisted living.

The U.S. Department of Veterans Affairs provides long-term care benefits to qualifying veterans and qualifying spouses of veterans. For more information about these benefits, visit the VA’s Geriatrics and Extended Care page.

Basic Rate Versus Extra Charges

As you begin to compare the cost of various assisted living facilities, keep in mind that some monthly rates are “all inclusive” while others cover only basic services, with extra charges for additional services such as full laundry services and housekeeping, custodial care, diapering and toileting, and social and educational events. You need to be mindful of those differences when you are projecting the total monthly cost associated with each facility. Make sure you are comparing apples to apples when you compare the expense of living in each of the facilities you consider.

ALERT: Keep in mind that your Mom and Dad or loved one will incur additional costs as their care needs increase over time.

Additional Expenses

As is typically true of apartment living, residents must usually pay a security deposit in advance. Unlike most apartments, some assisted living communities charge a one-time “entrance fee.” That fee is nonrefundable and is not credited as a rent payment.

Residents who are visited by guests will be charged an additional fee if the guests consume meals or spend the night in a guest unit. Residents may also need to pay for off-site services that are arranged by the facility on the resident’s behalf, as well as transportation provided by the facility to places that are not included in regularly scheduled activities.

Making a Budget

Before you can select an assisted living facility, you will need to make a realistic budget so you know what you can afford. Consider the following:

• If you have long-term care insurance or health insurance that covers assisted living, what monthly benefit will that policy pay?

• If you are eligible for government benefits, what benefit will you receive?

• If you sell your home, how will you invest that money and what return on your investment will you receive?

• How much income will you receive from social security and retirement plans?

• How do costs change when you move between independent, assisted, skilled nursing, or dementia levels of care.

Once you know what you can afford, you can begin to compare facilities to find one that meets your needs and your budget.

Tip: To help you budget, a good starting point is to ask the facilities you are considering to project what the costs would be over the lifetime of your Mom and/or Dad or loved one.

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