Senior Living Costs: How to Calculate and Plan Effectively

Two senior living residents enjoying coffee together while sitting outside

There are numerous reasons it may be the right time to explore senior living for your loved one. Perhaps your loved one needs specialized personal or medical care, or perhaps the family house is simply too big and the to-do list of chores is too long. 

No matter the reason, it’s a big decision that should be made with research, planning, and care. How to pay for senior living is often one of the top concerns. While there is a lot to think about when it comes to planning and costs, there’s also a process to understand and estimate the expected senior living costs for your loved one. 

Check out our detailed tips below for how you can best determine the costs of senior living.

Senior Living Lifestyle Choices and Payment Structures

Senior living communities offer a variety of lifestyle choices, and with those choices come different payment structures. 

Assisted Living

Assisted living is a good choice for seniors who need help with day-to-day personal or medical care. The median monthly cost of assisted living in 2021 was $4,500, according to Genworth. However, this is only an estimate because the cost depends on a few factors, including the level of care needed, location, community amenities, and community reputation. A private apartment, patio, and a pet fee can also affect the monthly assisted living cost. 

When it comes to monthly billing models, most assisted living communities fall into one of three categories: 

  • All-inclusive generally includes rent, meals, laundry, housekeeping, recreational activities, security, transportation, and anything else residents need. However, the definition of “all-inclusive” can vary between communities, and certain services such as medication management may be an extra cost. 
  • Level of care generally includes between 3-4 services such as laundry and meals, plus varying levels of assistance with medical and personal care—for instance, low level of care or high level of care. Higher levels of care have higher costs. 
  • Fee for service includes additional costs for each service that residents require. A fee-for-service community might not be a good match for those who will require memory care in the future, where the amount of care and services will be continuously increasing as the resident’s condition progresses. 

Memory Care

A memory care community is a highly specialized environment that includes around-the-clock care for those with Alzheimer’s or another form of dementia. Team members receive special training and ongoing education for dementia care. 

The monthly fees for these communities include the living space, food, special programming designed to support cognitive function, around-the-clock caregivers and nurses, and personalized care for hygiene, dressing, and more. It is important to note that as your loved one’s needs change over time, the cost of senior living in their community may also change.

Independent Living

Independent living is an ideal choice for active seniors who don’t need day-to-day help with personal or medical care. It’s a maintenance-free lifestyle where seniors can relax and enjoy their days without the burden of chores and household tasks. There are two types of payment options for independent living: an entrance fee model (sometimes called a “buy-in” model) and a rental model.

Entrance fees can vary anywhere between $150,000-$2,000,000. This initial entrance fee grants you access to the community and can also be partially refundable, depending on the contract. Once the entrance fee is paid, residents also pay a monthly fee that covers all services and amenities. Depending on the contract, the monthly fee can be locked in for the future regardless of the care level. 

The rental model begins with a small community fee that can range anywhere from $2,500-$15,000 before moving in. The monthly fee covers the apartment, housekeeping, dining plans, amenities, services, and any needed care. 

A Few Factors for Predicting Senior Living Costs

Senior living communities each have their own costs. Currently, the monthly cost of senior living ranges between $1,500-$10,000 per month, and a variety of factors play into this cost.


The cost of living in certain areas affects the price of a senior living community. For example, a senior living community in a metropolitan area like New York City may charge more than a senior living community in a smaller town like Sedalia, Missouri.

Size of Apartment

The size of your loved one’s living space can affect cost. For example, a studio apartment will cost less than a one- or two-bedroom apartment. If your loved one chooses to have a garage, patio, or other bonus feature in the floor plan, this can also raise the cost.


The types of recreational activities and classes available to residents can affect cost. For example, the addition of a fitness center, movie theater, and unusual or specialized social activities will be reflected in the monthly cost of a community. 

Compare Costs and Benefits 

To have a better idea of whether your family can afford the cost of senior living, compare what your loved one is paying currently to live at home against the monthly fee for a senior living community. 


Gather up all current monthly expenses such as utilities, landscaping, mortgage, food budget, entertainment, and any other living expenses, and add those together. Compare this figure to the cost of the senior living community, and keep in mind that all utility fees are included in the figure for senior living. Your loved one doesn’t have to worry about household chores and maintenance, and they’ll be receiving three or more meals per day. Additionally, a senior living community has many more on-site amenities and services for your loved one than they may currently have in a house. 

How to Pay for Senior Living 

To determine what you will need to pay for senior living, research resources that are available to your loved one to offset costs. This may include insurance, veterans benefits, and Medicare. 

Long-Term Care Insurance

These policies are meant to cover a specific service for a fixed amount of time and a fixed amount of money. No two policies are the same, and they vary between what is and isn’t covered. It is important to read your policy or contact an expert to be certain of what is included.

Third-Party Insurance

Some seniors may have third-party insurance in addition to Medicare. Third-party insurance plans often cover assisted living, memory care, or skilled nursing.

Life Insurance

This is an uncomplicated option to access the cash built up in an existing, in-force life insurance policy by converting it to a pre-funded account. It is important to note that the funds won’t be paid out at face value, but this option generally pays out more than the surrender value of the policy.

Veterans Benefits

The VA provides VA Aid and Attendance benefits to eligible veterans and their spouses. To receive this benefit, veterans must be signed up for VA healthcare, receive VA approval for the type of care and services, and be living in an area where the services are available.

Home Equity

There are several options for using home equity to pay for senior living costs, including taking out a home equity line of credit or selling the family house. It is important to weigh the pros and cons of each home equity choice before deciding on this option.

Out of Pocket

Many people pay the majority of their senior living costs out of pocket. These funds can come from retirement accounts, investments, or savings accounts.


It is important to note that Medicare doesn’t cover the costs of a senior living community. However, it may cover short-term stays and some of the services received in a senior living community.

What’s the Next Step?

Cedarhurst Senior Living is committed to our residents, ensuring they receive compassionate care. We provide quality amenities and activities for our residents so they have what they need to live life to the fullest.

Need more help determining the senior living pricing for your loved one? Check out our senior living cost calculator to determine what senior living may cost. 

Want to talk about options? Our senior living experts are available to answer any questions you have about Cedarhurst, and they’re happy to help with the next senior living steps for you and your loved one.

Compare the costs of senior living to staying at home with our True Cost Calculator

This post was originally published in May 2023 and updated in October 2023.

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