Retirement Assets And Liabilities:
- My fictional couple wants to retire next year at age 50.
- Like many people these days, they remain worried about inflation, both pre-retirement but more importantly during retirement when they are no longer working. So, Ive pegged inflation at 3% sustained until age 90. Inflation could of course be higher near-term or lower over time. Who knows! I believe 3% is rather safe for projections purposes over the coming decades.
- Ashley and Tim are sharp because not only do they read My Own Advisor all the time (thanks very much! but they know with inflation running higher, they will need more stocks than bonds over time to generate returns from their portfolio. Theyve learned to live with stocks in fact and own many income producing dividend stocks like I do. So, they are 100% stock/equity investors + a cash wedge.
- They own a collection of dividend paying stocks that should deliver about 6% long-term equity returns over the coming decades, assuming they remain 100% equity for the coming decades.
- They also own one low cost ex-Canada ETF in XAW. By owning XAW, they remove individual stock selection bias by owning thousands of stocks from around the world beyond Canada for long-term growth. By owning XAW they even fired their financial advisor
Average Cost Of Seniors Residences
The average rent for bachelor units and private rooms that include at least one meal is on average $2,210 per month. Cost of seniors’ residences varies across Canada.
Find out about the cost of seniors housing in your province or territory in the Canadian Mortgage and Housing Corporations Seniors housing reports.
The Benefits Of Assisted Living
There are many benefits to assisted living. Here are just a few:
- Peace of mind. Most assisted living communities offer emergency response and security systems campus-wide. If anything should happen to your parent, someone will be there to take care of them. No more worrying in the middle of the night whether theyve fallen or not no more wondering why they arent picking up the phone.
- Quality care. At an assisted living community, your parent will have the assistance they need as they go about their day, from their first cup of coffee to their nighttime routine. Theyll still have agency to act on their own, but at the same time theyll have help with things such as medication management, bathing, or dressing.
- Lifestyle options. Of course, your parent is more than their health needs. The assisted living communities of today are focused on offering social activities, cultural programs, group outings, gourmet dining, and even professional entertainment. Residents can be as social as they want and are free to do as they please.
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The Hidden Benefits Of Community Living
So, whats better: aging in place or moving to a retirement community? Its definitely your call nobody can make that choice for you. Even after taking all these different factors into mind, it might be hard to see which way the scales tip.
But you now have the facts. Hopefully thats given you a firm understanding of the cost of retirement communities. Now, we invite you to take the next step and shop around. If you think community living might be for you or an older relative, feel free to select an Acts community and get pricing information. Its free and there are absolutely no strings attached!
A Recent Rise In Costs
In 2022, the average national cost of assisted living rose to over $4,500 per month. Due to a growing shortage of qualified caretakers, facilities have needed to pay more in order to secure the right people. Recent hikes in minimum wage requirements and changes in overtime payment legislation are also increasing assisted living costs.
Additionally, more adults with Alzheimers and dementia are entering retirement homes than ever before. Finding qualified staff to take care of their specific set of needs is proving to be quite expensive. Finally, with older adults waiting longer to sign up for long-term care, the care they end-up needing often proves more costly.
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Common Issues With Using Medicaid For Assisted Living
After you have done your preliminary research and found some assisted living facilities that accept Medicaid, you may run into some bumps along the road. Its important for you to know what they are so you can plan your solutions ahead of time.
Unfortunately, a lot of people encounter issues getting qualified for their states HCBS waiver.
Some Common Hurdles:
- HCBS waivers may require a higher level of medical need than that for which your senior qualifies.
- HCBS waivers often have limited spots, and you may find yourself on a waiting list even if you qualify from a medical or financial standpoint.
- See if your state offers non-Medicaid programs for assisted living or independent living.
- Plan two or three of the other funding options listed above.
- Work with a geriatric care manager who knows the resources in your area.
Medicaid is a complicated system, but it does provide useful services for long-term care.
Now that you have all the basic information, you should be able to build a solid plan to get the best care possible for your loved one. Be sure to utilize the many resources available to you!
Caring.com is a leading online destination for caregivers seeking information and support as they care for aging parents, spouses, and other loved ones. We offer thousands of original articles, helpful tools, advice from more than 50 leading experts, a community of caregivers, and a comprehensive directory of caregiving services.
Living In A Retirement Community Means Planning Your Budget Carefully
When planning your retirement, one of the most important decisions youll make involves where to live. Moving to a retirement community can offer advantages when it comes to amenities, recreation, and being able to connect with other seniors. However, its important to consider what youll pay for senior living and how it compares to other options.
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States With The Highest Nursing Home Costs
Alaska has the most expensive nursing home costs in the United States. A semi-private room averages over $330,000 per year and a private room averages over $351,000 per year. Because Alaska is separated from the rest of the United States and is generally very remote, all medical costs are more expensive than in other states. Alaskas nursing home costs surpass the rest of the country by a very large margin. The cost of both semi-private and semi-private rooms in Connecticut, which has the second-highest costs for nursing home care, cost less than half of those in Alaska. Most of the states with the highest nursing home costs have the highest overall cost of living in the United States.
How Much Do Nursing Homes Cost
In 2022, a nursing home costs about $8,000 per month for a semi-private room and $9,300 for a private room. These totals represent national averages however, your actual nursing home costs will vary greatly based on three factors:
- Care and Health Care Needs
- Different types of skilled nursing will come at different prices.
- Type of Room
- Most facilities offer both private and semi-private rooms.
- Location of the Nursing Home
- Cities tend to be more expensive while rural settings are often less so.
When budgeting for the future, its important to keep in mind where you may want to retire and which homes might suit your needs. While you may not have all the answers, the factors that impact nursing home costs will help you prepare better. Here are some of the other factors to consider when looking into nursing home costs.
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How Are Care Levels Assessed
Although the components of each level of care vary from facility to facility, there are some basic guidelines. Many assisted living facilities use a point system to determine a residents required level of care.
No cost-of-care fee applies if the resident is considered independent and doesnt require any help. This can also apply to residents who only need verbal instructions to complete the activities of daily living .
Residents who do require care are assessed prior to moving into the facility. The components that typically determine the level of care a resident requires are listed below.
- Standing up from a seated position
- Climbing stairs
Residents who are able to manage their incontinence without assistance shouldnt have this service factored into the price of care.
Residents who require help with their supplies will be charged.
Higher levels of care include residents who exhibit behavioral issues around their incontinence for example, a resident who refuses to let aides change his or her diapers.
It is common for facilities to price incontinence care according to an individual residents needs as a separate service.
A resident who requires care from multiple caregivers simultaneously is likely to be assessed at a higher level of care.
Some situations that would require multiple caregivers include:
Residents who require eating assistance can fall into all levels of care.
What Is The Average Monthly Cost Of Retirement Homes
The average cost of a retirement home ranges between $1,500- $6,000 per month. This rate covers the accommodation, selected amenities, meals, and other services set in most retirement homes. While most forms of government health insurance administered under the Canada Health Act do not cover time in a retirement home, you may still qualify for some provincial government funding in specific scenarios you canread more about the different methods here.
While people can choose to age in place, they will miss out on the perks that come with retirement homes. Depending on ones personal needs, there is a wide variety of living arrangements for seniors. Some main types of care offered in retirement homes are independent living, assisted living, independent supported living, and specialized memory and dementia care. Theretirement homes offered by Seasons Retirement allow the flexibility for seniors to switch retirement homes as their needs change.
The cost of retirement homes is based on factors such as the following:
The type of accommodation
Retirement homes offer different accommodation plans, depending on the level of assistance required for each individual. These varying accommodations affect the monthly cost per resident.
The type of housing provided
The cost of retirement homes in Ontario depends on the type of housing. Seniors have various options, including private apartments, villas, and condos, among other housing plans.
Whats Not Included In Aging In Your House Costs
To get a clearer picture of the monthly or annual costs associated with remaining in your home, you also need to include other expenses, outside of housing, in your cost comparison. These expenses include groceries, lawn care, snow removal, and cleaning or housekeeping services, as well as gym memberships, dining out and entertainment, even transportation fees, such as a car payment, car insurance, or rideshare expenses. Youll also want to consider the cost of in-home care, or a home health aide in the event you require additional help.
How Much Do You Need To Retire Its All About The Math And Some Assumptions
To quote a reader comment:
Interesting case study and very interesting comments. Different people will certainly have different cash flow requirements.
Ultimately, I believe for all of us, you need to consider what your desired spend is to determine your enough number.
Were all different.
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Medicare Coverage For Nursing Home Costs
Medicare will only cover skilled nursing care expenses in very specific situations and is not designed to pay for nursing home or custodial care costs long term. One such situation is when a senior has been hospitalized and released, but still requires a bit of specialized care. Medicare will help pay for short-terms stays in nursing homes if they:
- Were admitted to the hospital for a minimum of three days as an inpatient.
- Have been admitted to a Medicare-certified facility within 30 days of the hospital stay.
- Need skilled care like physical therapy, speech therapy, and other types of rehabilitation.
Those who meet all of these conditions under original Medicare will qualify for assistance as follows.
- Up to 20 days of nursing care is 100 percent by Medicare.
- After day 21 and up to day 100, patients will pay a copay that averages $194.50 per day.
- After 100 days, all Medicare coverage ends, and all payments are the patient’s responsibility.
How Levels Of Care Affect Pricing
Many assisted living facilities base their pricing structure on the level of care that each resident requires.A resident who doesnt require any specialized care can expect to pay less than someone who needs verbal instructions, reminders, or assistance with activities of daily living such as bathing, toileting or dressing.
However, if a person needs hands-on care, such as help getting around, feeding themselves, or takes a great deal of medication , the cost increases subsequently.And if your loved ones needs change during their time in a senior care community, the monthly cost can be expected to fluctuate.
However, most facilities provide a detailed list of pricing and levels of care, both at the time of move-in and annually, or if requested during a care review.
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What Goes Into Assisted Living Costs
The one-time move-in fee is like a reservation deposit for holding your spot at an assisted living facility, many of which have lengthy waitlists. Some facilities will refund this charge in the event that you are unable to move into the property. Additionally, your monthly rental fee would cover the likes of apartment rent, exercise, health and wellness programs, utilities, basic housekeeping, maintenance, transportation, personal assistance, and catering.
The Cost Of Assisted Living
We frequently find that one of the first questions people ask is, What does assisted living cost?
If you search that question, youll see one common answer popping up over and over again: It depends. Frustrating, we know you just want a straight answer.
The truth is that costs can vary based on location, apartment size, each individuals care needs, and so on. Its difficult to give an exact dollar amount for those reasons.
But, with that said, there is a general range of fees you can expect from assisted living communities. According to Genworth Financials Cost of Care Survey, the national median monthly cost of an assisted living facility in 2020 was $4,300 $8,821, depending on the level of care. The projected median for 2022 is $4,562 $9,358.
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How Much Does Assisted Living Cost For A Couple
Assisted living can be a great option for mostly self-sufficient older couples who need a bit of help, but it can be expensive. As of 2021, the median monthly cost of assisted living was $4,500 per person. Couples typically dont pay double, since they live in the same apartment, but will need to pay for the second persons meals, medical care, and other expenses.
Pro Tip: Want to learn more about assisted living costs for couples? Take a look at our guide to senior living for couples for more details.
Of course, these costs vary greatly depending on the area of the country the facility is located in, the size of your living quarters, how luxurious the facility is, which amenities are included, and many other factors. In addition, if one or both of you need medical care, memory care, or other services, costs will increase.
The Complete Guide To The Costs Of Senior Living
Many older adults would love to spend the next chapter of their lives in an all-inclusive Life Plan Community . However, if youre among those with concerns about paying for community living, you may be surprised to learn thatwith a value beyond compareits more affordable than you think.
If you or a loved one is thinking about making the move to a Life Plan Community, it can be helpful to first understand the costs involved, which is why weve created this comprehensive guide.
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How Much Do You Need To Retire On $5000 Per Month Summary
The math doesnt lie.
If you save enough, have modest overall spending needs, earn modest rates of return, you can retire early and still have a few million in the bank to liquidate the house in your 90s.
With a portfolio value of $1.3 million give or take thats plenty to spend $5,000 per month throughout retirement until age 95 and then some.
I look forward to posting more case studies over time.
Do you have some ideas for a case study? Got something on your mind? Leave a comment and ask away. I will do my best to accommodate some more!
Retirement Community Monthly Fees
While you may not pay an entrance fee to live in a retirement community, theres still a monthly fee to contend with. According to the senior living referral service A Place for Moms National Senior Living Cost Index, the median monthly cost of independent living was $2,522 in 2018, the most recent year for which numbers were available. Thats just over $30,000 a year. Still, its possible that you could pay more or less, depending on the community in which you choose to live.
If youre moving to a retirement community at age 55, the minimum age to join most senior living communities, youd have to consider how the monthly fee fits into your budget. While you could begin taking Social Security benefits at age 62, that would still leave you with a seven-year gap to fill. And you also have to be mindful of taking money from a 401 or an individual retirement account prior to age 59½, as that can trigger tax penalties.
In that scenario you may have to pull money from savings accounts, certificates of deposit , or a taxable brokerage account to cover the cost if youre not working part or full time. Taking money from a taxable account can affect your tax liability, so you may want to talk to a tax pro about the implications of using that money to pay for retirement community living.
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