How Care Type Impacts the Cost of Senior Living

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How Care Type Impacts the Cost of Senior Living
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Saving for retirement means having a plan in place for senior care, and a significant part of this plan is how it fits into personal finances. Even if your loved one hasn’t yet decided how they want to spend their retirement, you can help them prepare by understanding how senior living pricing works and what impacts the costs.

Predicting the Cost of Senior Living

Trying to determine how much to save for retirement can be tricky. Not only does senior living pricing vary according to several factors, such as location and features, but different lifestyles or needs may also require specialty care. 

The more you know about senior living costs and their inclusions, the more confident you can feel about making a decision. If your loved one is unsure about searching for a senior living community because of financial concerns, empower them by talking candidly about senior living pricing.

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How Care Type Impacts Senior Living Pricing

Naturally, not all senior living communities cost the same. Just as all communities are unique, their fees are also different. A handful of different factors impact senior living pricing, including: 

  • Location of the community
  • Size of the apartment
  • Type of care needed
  • Amenities offered on-site

Location of the Community

The location of the community affects monthly fees, similar to real estate costs. You might find that some communities in rural areas are generally less expensive than those in a more expensive suburb or city. Also, certain neighborhoods or cities might be more expensive due to corresponding real estate trends. These price increases often translate to senior living costs as well.

Size of the Apartment

The type of apartment your loved one chooses will also influence monthly fee amounts. Just as larger homes often have a larger price tag, larger apartment floor plans can increase the monthly fee. Fortunately, exceptional senior living communities take into consideration the budgets of those they serve, often offering a variety of floor plans that can include studio and smaller one-bedroom choices to help keep monthly costs down.

Type of Care Needed

Senior care needs can also impact the monthly fee at a community, particularly in assisted living, memory care, and skilled nursing communities, which include more involved care. When you research senior living communities, inquire if they have a fee schedule for increased services or care. Then, speak candidly to your loved one’s physician to determine what type of care your loved one needs now and could need in the future. This can help you with future financial planning.

On-Site Amenities

Finally, similar to all real estate purchases, senior living fees vary based on amenities and services offered on-site. However, money spent to live in a community that features easy access to transportation, housekeeping visits, and wellness resources is a wise investment in your loved one’s well-being.


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Common Senior Living Pricing Models

Generally speaking, senior living communities either ask for a large entrance fee payment or offer a simple month-to-month billing schedule. Here’s how they work:

Entrance Fee Model

Many senior living communities require an entrance fee, which is a large sum that’s often equivalent to real estate pricing in the area. Depending on the community and the terms of the contract, this entrance fee may decline or amortize over time, or there might be a guarantee of a certain percentage that’s given back to your estate. In addition to the entrance fee, life plan communities also bill a monthly fee to cover services and amenities.

Rental Model

Many independent living, assisted living, memory care, and skilled nursing options don’t have an entrance fee system. Instead, residents pay a monthly fee similar to rent. Seniors can expect the fee to cover nearly every aspect of their apartment and lifestyle.

Monthly fees cover much more than a spacious, modern apartment. One monthly fee also usually covers: 

  • A comprehensive and delicious dining plan that includes chef-styled meals up to three times daily
  • A vibrant and diverse event calendar full of carefully planned trips and opportunities
  • Utilities and Wi-Fi connectivity
  • Housekeeping and laundry services
  • Access to transportation

If you aren’t exactly sure what the monthly fee covers at the senior living communities you are researching, just ask! Team members are there to provide honest answers as you walk through your decision-making process. 

It can be helpful to take a moment to write down all the monthly bills that your loved one currently pays and compare that lump sum to a monthly fee at a senior living community. (We have a handy TRUEcost calculator to help you easily do this.) Chances are, you will be surprised at how closely they align and how many more services your loved one will receive at a senior living community. Families are often unaware of the true costs of aging in place and are surprised to find out that seniors live longer, happier lives in senior living communities.

How to Offset the Costs of Senior Living

Sit down with your loved one and take a close look at their budget together. If you find that you need to offset senior living costs for your loved one, there are a few opportunities you can explore: 


Start by reviewing any long-term care insurance policies that your loved one may have. Depending on the type of care they need and the type of policy they may hold, you could find some discounts there.

Veteran Benefits

If your loved one is a military veteran or the spouse of a veteran, there are aid and attendance benefits and a household allowance that can offset assisted living costs for those who are eligible. You can talk to the senior living community or your loved one’s U.S. Department of Veterans Affairs caseworker if you have more questions about this benefit.

Financial Planning

Speaking with your loved one’s financial planner can also be quite helpful as you assess your loved one’s budget for current and future care. Sit down with a financial professional together to help calculate and narrow down options for your loved one.

When It Comes to Senior Living, Good Preparation Is Priceless

Understanding the various pricing models, expenses, and inclusions in the cost of senior living is the first step to finding a senior living community that fits your loved one’s lifestyle and needs. Although it can be difficult to predict future needs, having the right support and resources in place to help you and your loved one through the process is invaluable to the senior living experience.

Our goal at Cedarhurst is to empower you and your loved one with the information necessary to make the right decision. You can learn more about evaluating pricing, building a budget, and finding the right community in A Complete Guide to Financial Planning for Senior Living.

Financial planning for senior living

This post was originally published in June 2021 and updated in May 2024.

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