13 Smart Ways To Afford Long-Term Care When Money’s Tight

Seven out of every 10 Americans will eventually need access to assisted living services, but at an average of $4,300 a month, assisted living isn’t cheap.

It’s crucial to prepare yourself financially as soon as possible for the care you could need later in life, and there are certain things you can do to get ahead.

Here are 13 essential tips that can help you afford assisted living no matter how many years away you are from that stage of life.

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Find Out: 8 must-do things before 60 for a stress-free retirement

1. Consider long-term care insurance

Generally speaking, Medicare doesn’t cover assisted living costs. (Specifically, it doesn’t pay for custodial care, which is care related to carrying out basic daily tasks.)

If you want help paying for long-term assisted living, consider taking out a long-term care insurance policy that covers custodial care.

Long-term care insurance is available from private insurers, so meet with your insurance broker to find the right policy for you.

Check the maximum lifetime amount your insurance provider will pay and any limits imposed on the number of years your insurance will help cover assisted living costs. Some policies help you pay for just two or three years of assisted living at most.

2. Sign up in your 60s if you want long-term care insurance

The older you are, the pricier your long-term care insurance policy is likely to be. If you’ve been diagnosed with a condition that will require long-term assistance (such as dementia or Alzheimer’s), you might not be eligible for a long-term insurance policy.

As soon as you’re considering retiring (say, around age 60 to 65), start reviewing long-term care insurance options. Otherwise, you might not be able to access the health insurance coverage you need right when you need it.

3. Consider relocating to a state with a lower cost of living

Living in an expensive state like California or New York might have been possible when you were bringing in a full salary. But once you’re living on retirement savings and Social Security, that cost of living could put a huge strain on your budget.

Moving from a high-cost state to a low-cost state can help you stretch your retirement savings further, leaving you with more money to spend on assisted living.

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4. Apply for VA health care

If you’re a veteran or the surviving spouse of a veteran, you might qualify for assisted living benefits through the Department of Veterans Affairs.

You’ll want to reach out to your VA caseworker or apply for care online to see if you qualify if you don’t currently have VA health care benefits.

5. Find out if you’re eligible for Medicaid

You might qualify for Medicaid benefits if you’re over age 65 and/or living below a certain income level. Unlike Medicare, Medicaid contributes to the costs of assisted living care.

While you can qualify for both Medicaid and Medicare simultaneously, note that Medicaid assistance and qualification can vary from state to state. Visit your state government’s Medicaid site to learn more about how to qualify.

6. Budget for long-term care as early as possible

Unfortunately, waiting until you need long-term care to start figuring out how to afford it is a near guarantee you won’t be able to.

While there are strategies you can follow to make assisted living as affordable as possible — including those we listed above — the best way to pay for assisted living is to start planning for retirement as early as you can.

7. Look into cashing in on your life insurance policy

If you don’t have any other payment options, getting the cash value of your life insurance policy could be worth considering. Taking this step will impact the amount of money you can leave as an inheritance, so it can be a painful choice to make.

However, your health care needs have to come first, and going into debt to pay for assisted living won’t do you or your beneficiaries any good.

8. Consider your home equity options

If you own a home, selling it or taking out a reverse mortgage could also get you the cash you need to fund assisted living care.

Reverse mortgages can be dangerous and tip you into living with more debt, so you’ll want to discuss your options with a financial counselor and carefully weigh the pros and cons before going this route.

9. Get a shared room rather than a private room

Depending on the care facility you’re considering, you might be able to choose between having your own room and sharing with a roommate.

The latter choice definitely decreases your privacy, but it can make the overall cost of care more affordable, so don’t rule it out as an option.

10. Ask about move-in discounts or other specials

As you tour assisted living facilities, go out of your way to ask about any discounts the facility provides to new residents. You could learn that some of the facility’s costs are less fixed than they seem.

11. Carefully compare care facility costs before moving in

Assisted living costs can vary widely between facilities. Don't just sign up for the first assisted living service you find or choose the one closest to your current home.

Instead, tour various facilities and keep a detailed list of all their costs so you can make an accurate, informed decision.

12. Make sure your kids know about caregiving tax breaks

Instead of moving into an expensive assisted living facility, some seniors move in with children or grandchildren who are willing and able to provide a certain amount of care.

If you and your family decide this is the right choice for your budget and health, the family members caring for you might qualify for a caregiving tax break. Talk to your tax professional to learn more about the specifics of qualifying.

13. Find ways to supplement your income post-retirement

If you’ve already retired and are worried your savings won’t be enough to carry you through assisted living care, picking up a side gig could give you much-needed peace of mind.

Driving for a ride-share service, selling crafts on Etsy, or working as an online tutor can help you add money to your savings to help pay for assisted living care.

Bottom line

While you might beat the odds and end up among the 33% of Americans who don’t need assisted living care, the risk isn’t worth taking.

If you haven’t yet retired, start saving now to eliminate some money stress and prepare yourself ahead of time.

And if you’re looking for affordable care while worrying about your budget, don’t give up hope. These strategies can help you find cost-effective care that maintains your quality of life without draining your savings.

Money tips that can work for everyone

No matter what your bank account balance is, there's always an opportunity to optimize and improve your finances. Here's a quick checklist of things you can look at today.

Focus on paying off your debt. Debt can hold you back from making progress with your overall financial well-being. Aside from cutting expenses, there are tools that can help you pay off debt faster like balance transfer credit cards and debt counseling.

Earning extra income can give you breathing room. If finances are tight, earning some extra money to supplement your income can make a huge difference. A new job is one option to consider, but if you're not ready to make a big change or already retired, a part-time side job could be a better choice.

Cut your expenses. It sounds painful and so not fun, but it doesn't have to be. Take a look at your biggest expenses because that's where you'll probably find the biggest savings. For example, auto insurance rates have been soaring so shopping around for a new insurance company can be the fastest way to cut your bill. Also, look for ways to cut your grocery bill (despite rising inflation).