How to Afford Assisted Living When Your Parents Run Out of Money?

12Oaks-elderly father and his daughter making financial plan-as-How to Afford Assisted Living When Your Parents Run Out of Money_-Feature

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Given the soaring inflation, there is a grim reality that most American seniors may not have enough to afford assisted living and other senior housing by 2033.

What happens to the elderly with no money? While it is evident that they struggle to make ends meet from day to day, another repercussion faced is a lack of ability to afford elder care and assisted living when the time comes.

Did you know that there are a number of financial assistance and cost-saving measures you can use to help your parents afford assisted living and economize costs?

Let’s go over our list of 14 financial options to help your parents afford assisted living when they run out of money.


Affording Assisted Living: 14 Options to Help Your Parents Pay for Assisted Living When They Are Short on Money

Assisted Living: Median Cost & Contributing Factors

Assisted living is a good choice for seniors seeking assistance with daily tasks, such as light housekeeping, grocery shopping, giving reminders, performing hygiene tasks, etc.

Genworth estimates that the median cost of assisted living in the United States in 2022 is $4,500, breaking down to $148 a day and adding up to the annual cost of $54,000. Given that home health aide services are $56,160 per year and a private room in a nursing home costs a staggering amount of $108,405 per year, assisted living is a less expensive option.

A number of things can contribute to the monthly rent of assisted living, including the room size, the location, amenities, and extra services. These factors can cause assisted living costs to fluctuate from one place to another.

Despite the reasonable price, it is important to note that the prices can be shifted dramatically across the states and cities. The assisted living cost tends to be higher in metropolitan areas or expensive states like California, New York, or Massachusetts. Assisted living tends to be more affordable in the least costly states or rural areas.

For example, residents from the Northeast of the U.S. have to pay up to $6,000 per month, whereas those living in the Midwest only have to pay as little as $3,000 for assisted living. The costs are more likely to increase if you seek exceptional care for your parents diagnosed with dementia or Alzheimer’s.

To estimate the future cost of all types of senior care, check here.


14 Options to Afford Assisted Living When Having No Money

What happens to the elderly with no money? Here are 14 financial assistance options to help afford assisted living when your parents or someone you care for do not have much in their savings.


Ask for Family Contributions

12Oaks-Two women using laptop writing on notebook sitting on table at kitchen-as-1 Ask for Family Contributions

Getting your siblings and extended family on board is a great way to minimize your parents’ financial burdens. Since this is a sensitive topic, start by reaching out one-on-one to see if they are open to sharing your financial responsibility. Explain the situation, ask for their fresh ideas and perspectives, and discuss the best course of action to ensure financial security for your parents.


Serve as A Primary Caregiver

12Oaks-mother and daughter-as-2 Serve as A Primary Caregiver

Volunteering yourself or encouraging another family member to assume the caregiver role is one of the best ways to provide elder care for your parents. While this approach helps cut the cost significantly, it is only feasible when the caregiver is liable and has adequate resources for elder care.


Social Security Benefits

12Oaks-Thoughtful man writing in notebook while managing budget at home-as-3 Social Security Benefits

Social Security is a valuable source of income that many seniors rely on to support their post-retirement lives.

You may wonder if Social Security can cover assisted living costs when your parents are low on money. It is essential to clarify that Social Security benefits won’t pay for the entire cost since the average payout ranges between $2,364 and $4,194. But it is still better than nothing at all.


Use Veteran’s Benefits

12Oaks-Veterans at National Holiday Ceremony-as-4 Use Veteran_s Benefits

If one of your parents used to be a military service member or served in wartime, there is a high chance that they are eligible for Veteran benefits and pensions. It helps support a wide range of senior care, from assisted living and home health care to skilled nursing and adult day care.


Enroll in Medicaid

12Oaks-elderly couple consulting with doctor in clinic office-as-5 Enroll in Medicaid

Medicaid is a joint program between the states and the federal government to provide better medical access for individuals who fall into the low-income bracket. Does Medicaid cover assisted living? It depends on some requirements and factors. Check with your state or visit the Health Insurance Marketplace to see if your parents qualify.


Hire Part-time Caregivers

12Oaks-Friendly nurse supporting an elderly lady-as-6 Hire Part-time Caregivers

Hiring part-time caregivers is another economical option to place your parents in relatively good hands when they run out of money. Depending on the prior agreement, they can drop by at different times of the day to check on your parents, sort out household matters, and complete unfinished tasks.


Purchase Long-Term Care Insurance (LTCI)

12Oaks-Financial consulting with man and mother for retirement deal-as-7 Purchase Long-Term Care Insurance (LTCI)

Long-term care (LTC) insurance is a beneficial way to cover the costs associated with elder care, mainly if your parents become incapacitated one day. Despite the benefits received, the policy premiums can be quite expensive, and your parents can only access the funds after the waiting or elimination period expires. Help your parents with financing the policy premiums or encourage them to opt for this coverage as soon as possible before their money runs out.


Section 202 Program

12Oaks-elderly mother and her daughter using tablet-as-8 Section 202 Program

The Section 202 program, established in 1959, is exclusively designed to build low-rent housing with supportive services for seniors over 62 or with very low incomes. Prospective seniors need to meet eligibility and requirements set by HUD, and they can apply for the program with the community or facility they are interested in. Visit HUD to learn more about the Section 202 program and check for availability.


Residential Care Homes

12Oaks-Retirement and assisted living facility-as-9 Residential Care Homes

Residential care homes are another option for low-income seniors to afford a similar form of assisted living. These housing settings are often situated within neighborhoods, making them an accessible and friendlier option for seniors who may feel overwhelmed by large communities or facilities. Due to the smaller size, residential care homes are frequently priced at lower rates. Remember that these homes don’t come with advanced care, so consider if your parents need more than basic housing and services.


Non-Medicaid State Assistance

12Oaks-Woman making phone call-as-10 Non-Medicaid State Assistance

You can find a range of state-level assistance communities and non-Medicaid programs to help cover costs associated with elder care. Depending on where you live, each program offers different forms of assistance. While some states provide beneficiaries with money to pay for whatever they see fit, others operate their own communities and provide affordable rooms for qualifying seniors.

For more information and eligibility guidelines, connect with your local Area Agency on Aging.


Assisted Living Conversion Program (ALCP)

12Oaks-senior woman having breakfast with home care-as-11 Assisted Living Conversion Program (ALCP)

Assisted living conversion program aims to provide funds for homeowners to convert standard houses to cost-effective housing units or apartments for seniors. The ALCP facilities are required to offer comparable services to licensed assisted living facilities, including housekeeping, meals, transportation, medication, and personal care.


Apply for Reverse Mortgage

12Oaks-Senior couple during the meeting with financial consultant-as-12 Apply for Reverse Mortgage

Taking advantage of reverse mortgages is another favorable option for seniors to fund elder care and long-term care costs. This practice involves taking out a loan based on assessing the house’s market value. To apply for the program, your parents must be:

  • Over the age of 62.
  • A permanent resident or live in the house for at least a year or longer.
  • Not indebted to federal income tax.


Downsize or Sell Assets

12Oaks-Happy retired couple relocating to new appartment-as-13 Downsize or Sell Assets

Selling the house or downsizing are the practical, popular solution for seniors to finance their senior care and future expenses when they are short on funds. After the successful sale, help your parents divide the profit and put it into various investments to maximize their income streams. Since selling a year-long house is a sentimental experience, be sure to sit down with your parents to go over all the possibilities and weigh out the pros and cons before making such a big decision.


Negotiate It Down

12Oaks-Happy black woman and her senior father talk to caregiver at nursing home-as-14 Negotiate It Down

Believe it or not, the assisted living cost can be negotiated. However, you might need to put in more effort for your haggling venture rather than plainly asking for it and hoping for the best. Dig into all associated costs, determine the services your parents need, and inquire about possible subsidies or discounts. Hire an agency to do it if you are not confident in your negotiating skills.


If you have questions about what happens to the elderly with no money and how to afford assisted living when your parents run out of money or any topics discussed here, connect with us and learn more. 

At 12 Oaks, our team of caring professionals is dedicated to keeping residents safe, engaged, and connected to their families and friends while leading fulfilling lives. 12 Oaks senior living communities are an ideal place to enjoy the encore season of life.

For questions or to schedule a personalized tour, don’t hesitate to contact us. 


Searching for senior living help? At 12 Oaks Senior Living, we would love to learn more about your unique needs and the opportunity we may have to help you meet them. Our blog is one of the valuable resources we provide to inform and encourage seniors to lead fulfilling and thriving lives. Contact us today to schedule a visit.

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