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Is Senior Living A Good Investment?
Date Updated: July 26, 2024
Written by:
Rachel Lustbader is a writer and editor with a background in healthcare and technology. Her work has been published on websites including HealthCare.com, BiteSizeBio.com, BetterHelp.com, Caring.com, and PayingforSeniorCare.com. She studied health science and public health at Boston University.
Both of Rachel’s grandmothers had very positive experiences in senior living communities, and Rachel saw firsthand the impact that kind, committed caregivers and community managers can have on seniors’ and their family members’ lives. With her work at Caring, Rachel hopes to help other families find communities, caregivers, and at-home products that benefit elderly loved ones and make life less stressful for family caregivers
Senior living is a good investment if a senior’s costs of aging in place are greater than the costs of long-term care. However, these costs vary widely by senior care options and states across the country.
Independent Living vs. Assisted Living Costs
The Genworth 2021 Cost of Care Survey places the average cost of assisted living at $4,500 per month, which comes out to $54,000 a year. That’s significantly higher than the average U.S. rent, which, as of mid-2022, was roughly $2,000 per month (or $24,000 a year).
However, the cost of assisted living includes a wide variety of amenities and services. Paying individually for such services can make independent living more expensive than assisted living. For example, assisted living communities usually offer three daily meals, local transportation, wireless internet, housekeeping and light medical assistance as part of their base services.
Home Care vs. Assisted Living Costs
The comparison between the costs of assisted living and in-home care is slightly more direct. Genworth’s data shows the average monthly cost of home care is $4,957, while the average cost of home health care is $5,148. The higher price covers in-home medical services in addition to help with daily living. Both are higher than assisted living’s average monthly fee of $4,500.
The price of in-home care doesn’t include regular rent or mortgage costs. Therefore, in most cases, seniors receiving in-home care find assisted living is a significantly cheaper option, although it’s less private.
Home Care vs. Nursing Home Costs
Seniors who require the more robust medical support of a nursing home see an average monthly price of $7,908 for a semiprivate room and $9,034 for a private room. These options are roughly $2,000 to $4,000 more expensive than home care on a month-to-month basis.
However, Genworth’s data assumes a 44-hour work week for the in-home care provider. Since seniors who need nursing-home-level care generally need 24-hour supervision, the actual price may be much higher. A 128-hour work week for the in-home care provider results in an average cost of $18,927 per month. That’s over twice the monthly cost of nursing home care, making a nursing home a better investment in such a case.