Paying for Independent Living

The common conception of senior living is that it is extremely (and sometimes even prohibitively) expensive. But while assisted living communities and nursing homes can cost anywhere between $2,500 and $8,000 a month for residents, independent living communities are a good deal more affordable for seniors and their families.

So, what's the reason for the lower expense? For the most part, it's right there in the name. Independent living communities-also sometimes just classified as retirement communities-are usually utilized by residents who can still look after themselves and take care of most or all of their day-to-day needs. Seniors living in these communities, in other words, don't need 24/7 assistance or nursing care, have limited medical needs, are still able to cook their own meals and maintain their own homes, and are still able to manage their affairs.

Most independent living communities do offer a few services to make life easier for seniors. Weekly housekeeping or laundry services aren't uncommon while community dining rooms offer a spot for seniors to get their meals and gather with their friends who also live in the community. For the most part, though, residing in an independent living community isn't so much different to living in their own house for a senior. In fact, most seniors opt to move into independent living communities not out of medical necessity, but out of preference. It may be a preference for a smaller living space or the vibrant senior social community that independent living complexes often provide.

The Costs of Independent Living (and How to Pay for Them)

As with any other type of senior housing, independent living communities run quite the range in costs depending on the location, services and amenities the complex has to offer, and how nice the apartments, condos, townhomes, villas, or other provided accommodations are. Average pricing can range from $1,500 to $4,000 a month for rentals while some senior living communities even offer villas or townhomes for sale.

Regardless of price, almost all seniors pay for independent living out of pocket. Many can pay their living costs out of their retirement savings, while others choose to finance their independent living expenses by selling their previous homes. The latter option is quite common, as many seniors tend to move into independent living communities as the first step from private homeownership to senior housing.

The reasons for seniors to sell their homes can vary. Some senior couples that have raised families find that big houses just become too much to maintain and deal with once they are empty-nesters. Others decide to adopt a snowbird lifestyle, spending summer in one part of the country and then heading elsewhere in the winter to avoid snow and other severe weather. In the latter case, downsizing to independent living makes it easier to leave for months at a time without worrying about what might happen to the house. Some seniors even do the math and realize that they could save money by selling their house and renting out a villa or townhome at a respected senior living community.

Bottom line, most seniors won't even have to worry about finances when it comes to choosing independent living. The rent rates and service fees at independent living communities are often in line with what you would expect to pay to rent a nice apartment or shoulder a monthly mortgage. In other words, when seniors move from one living situation into an independent living community, the financial adjustment is often not particularly severe or even noticeable (especially when compared to the adjustment to assisted living or nursing care).

What If I Need Help Paying for Independent Living?

If you or a loved one wants to move into a senior independent living community but won't be able to pay the costs out of pocket as suggested above, there might still be several other options available.

Government funding can and sometimes will help with independent living expenses. Medicaid does not cover independent living costs at all, but Section 202 of the Housing Act of 1959 establishes a Housing and Urban Development program meant to provide "capital advances to private, nonprofit sponsors to finance the development of housing for elderly residents." The Housing and Urban Development program also establishes rental assistance to help seniors pay for rent in any senior housing-be it an independent living community or an assisted living facility. Click here to learn more about the Section 202 program.

Long-term care insurance or life insurance can also help to cover the costs of independent living and other types of senior housing, as can veteran’s benefits-if you or your elderly loved one has previously served in the United States military. If paying out of pocket for independent living costs is simply not an option, then it is worth looking into each of these options. While it's unlikely that any of them will completely cover the cost of independent living, they could all help to reduce the cost to a more affordable rate.

Conclusions On How To Pay For Independent Living

While independent living is certainly not cheap-especially in comfortable communities with a nice range of opportunities and amenities-one of its biggest advantages is that it is more affordable than most other types of senior housing and care. You may well find that you or your loved one has no issue paying the monthly rents and fees associated with independent living out of pocket.

If cost is an issue, it's worth looking around your local area and price checking each independent living community nearby. As mentioned previously, these communities operate as private businesses, so their monthly rates can vary, and there's a chance that you can find options that are less expensive than the average pricing ($1,500 to $4,000) cited in this article. Just make sure you aren't choosing a subpar or lower rated independent living community just to save a few extra dollars.