How You Can Prepare for Senior Living Costs Right Now

Financial Planning   |   By HumanGood

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Connection, well-being and security — it’s what we all want for the next chapter of our lives. For many people, a Life Plan Community (LPC) offers a path to a life they love. 

However, many people are concerned about the costs of senior living, wondering how an LPC can fit into their budget. You may be surprised to learn that senior living is much more affordable than you think. In fact, in some cases, senior living can actually help you save money with all-inclusive pricing, enabling you to have more budget predictability.

While senior living can be a way to make your budget more predictable, it still requires a proactive approach to budgeting — just like any other plan for your future. Here’s what you can do to get ahead and start preparing now so you can choose the senior living option that is right for you.


Conduct a financial self-assessment.

Many people avoid taking a hard look at their finances because it’s stressful — so they instead focus on having or making as much money as possible without ever knowing how much they need. 

Planning begins with assessing where you are so you can get to where you hope to be. When you’re starting your financial self-assessment, you’ll want to look at your income, assets and expenses.

Make a list of debts, such as your loans, credit cards and other outstanding balances, and make a plan for how you want to tackle this debt. After looking at your income, expenses, savings, debt and assets, evaluate where you are in relation to where you want to be in the future and what your timeline is. Then, consider meeting with a financial planner, and be sure to bring this plan and your timeline to your meeting. 

Be honest about where you are, your goals and what you’re willing to do to attain these goals. While it can be uncomfortable to discuss finances, it’s important to be open and honest with your financial advisor because this can help you make realistic steps toward your goals and learn how to finance senior living costs.


Develop a plan. 

You’ll need to make several decisions based on your future. Consider whether you want to keep working, where you would like to live and what you would like to do. For example, are there places you’ve always wanted to visit or volunteer work you would like to participate in? 

The sooner you have a detailed plan for where you want to be and what you want to accomplish both now and years from now, the sooner you can begin working toward it. For example, researching senior living costs and the costs of vacations that you may want to take will help build a more accurate picture of how much you need to set aside.

Aim for your ideal plan, but remember that you may have to make some compromises based on how your finances and care needs may change. You may also have to compromise based on what’s available when you’re ready to move to a senior living community. 

An important part of developing a plan is to reevaluate it at regular intervals and make necessary adjustments — whether that’s adding, altering or removing plans. It’s also important to keep an eye on how costs have changed since you last evaluated your plan and where you are financially compared to what you need. 

Be sure to incorporate all relevant expenses into your plan, and remember that senior living may remove some expenses. This is why when you’re developing your plan, it’s important to be thorough with your research and find out what exactly is covered in your senior living costs.

call to action to download our free "Complete Guide to the Costs of Senior Living" guide

Build a realistic budget. 

We would all have more money if we cut out every unnecessary expense, but a shoestring budget may be unrealistic and can affect your quality of life. Instead, consider what’s important to you now and in the future, and then build a budget around these wants and needs. This is where regularly evaluating your future plan will be especially helpful.

Evaluate your budget each month. If you’re consistently going over budget, it’s important to assess why and perhaps build a more realistic budget. Exceeding your budget can be stressful right now, but it may also mean you may need to make adjustments to your plans for the future.

This is where it may be helpful to assess how senior living might help you better stick with your budget. For example, meals, entertainment, home maintenance, housekeeping, educational or fitness classes, and other essential costs, such as rent or a mortgage, that are a part of your budget right now may all be wrapped up into senior living costs later.


Get legal help.

Budgeting is a legal undertaking as much as a financial one. How you structure your assets can affect your estate and eligibility for programs such as Medicaid. 

Work with an estate attorney to develop a plan that supports your goals. This might include putting your assets into a trust, which can reduce the time it takes for loved ones to inherit them. 

If you own investment properties, you may choose to continue receiving the income from them, or you may choose to sell your assets to cover the entrance fee for your senior living community.

It’s also wise to address end-of-life decisions so that your voice will be heard if you ever become sick or unable to speak for yourself. While there is a legal component to this called an advance directive, it’s also important to discuss these matters with close loved ones. 

The most common types of advance directives are living wills and powers of attorney for health care. A living will details the type of care or treatments you want and which ones to avoid. A power of attorney for health care names your health care proxy, who can make decisions for you.


Downsize and declutter.

For many people, the profit they make from selling a house is the biggest source of money they can use to put toward the next chapter. Downsizing can take time, so start early and get help from loved ones. 

First, set up a plan by creating reasonable weekly and monthly goals. Take your time with the process. Don’t rush because this can make the process stressful rather than calm and centered on the positive aspects that await you, which is ensuring that your possessions align with your ideal lifestyle. 

Remember that decluttering will also create a bit of a mess at first. This is why it can be helpful to focus on one room at a time rather than objects of a specific category. At the end of each day, set aside a bit of time to tidy up any mess the decluttering process creates. 

Make the process fun. There are several ways you can do this, including binge-watching a show, playing your favorite music or listening to an interesting podcast. You can even get the family involved in the process by having a decluttering party during which you gift items to loved ones. 

Plan for your future home by investing in some new items that will make it feel extra comfortable and bring some pieces from your history, such as cherished heirlooms.

Lastly, get expert guidance about the right time to sell your house and whether to invest in home repairs. It’s also important to seek expert advice on staging your house to help build an emotional connection with a potential buyer. Staging a house can increase its selling price and help it sell more quickly. 


Learn more about senior living costs.

Senior living costs are important to prepare for, and the good news is that Life Plan Communities can be much more affordable than the ballpark figure that many people have in mind. Plus, the benefits of senior living, such as peace of mind and an environment designed for wellness and connection, are priceless.

For more information on senior living costs, explore “The Complete Guide to the Costs of Senior Living” or find a community near you to speak with a sales counselor about your specific situation.

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