3 Steps to Prepare a Budget for Senior Care

steps to prepare a budget

Life is filled with many things we can’t control. The weather. A pile of leaves on a windy day. A mischievous two-year-old. But there are some things — such as paying for long-term care — that are much more manageable when you have considered all your options. Having an actual plan of how to budget for senior care lets you make choices and decisions, rather than leaving things to chance.

Many people automatically assume they will not be able to afford long-term care, but you do have options. In fact, you might be surprised at how many options are available to you. At Senior Star, we’ve put together “A Family Guide to Funding Senior Care & Housing” that could be a great resource to get you started.

Understanding the need to budget for senior care

  • According to LongTermCare.gov, someone turning 65 today has almost a 70% chance of needing some type of long-term care services and support in their later years.
  • Women need care longer (3.7 years) than men (2.2 years).
  • The cost of long-term care in the U.S. has risen steadily over the past 15 years. In fact, Genworth states that from 2004 to 2018, the cost for senior living and in-home care services has risen on average from 1.5% to 3% per year.

Average monthly costs:

  • Assisted Living Community: $4,000 for a private, one-bedroom residence
  • Nursing Home: 24/7 care; semi-private room: $7,441; private room: $8,365

Medicare only pays for long-term care if you require skilled services or rehabilitative care:

  • In a nursing home for a maximum of 100 days.
  • At home if you are also receiving skilled home health or other skilled in-home services.
  • Medicare does not pay for non-skilled assistance with Activities of Daily Living (ADL) which make up the majority of long-term care services.

The costs associated with long-term care can be intimidating, and every family’s circumstances are different. But there are steps you should follow in planning a budget for senior care.  

Planning a budget for senior care:  3 steps to follow.

  1. Gather financial documents.

Locate and organize pertinent documents for yourself or your loved one including:

  • Bank and brokerage account information
  • Deeds and mortgage papers
  • Insurance policies
  • Monthly or outstanding bills
  • Pension and other retirement benefits
  • Social Security payment information
  • Stock and bond certificates
  1. Meet with family.

Get together with your family to talk about how to prepare a budget for senior care. Make it clear that everyone will have a chance to express their thoughts. Encourage questions and concerns. Talk about the specific needs of the loved one who will receive care. Remember to discuss ongoing financial duties, such as paying bills, managing benefit claims, making investment decisions and preparing tax returns. 

At the end of your family meeting, do a quick summary and designate who will help follow up on specific issues. If needed, go ahead and schedule the next meeting to review what information was collected, and to decide next steps.

  1. Consult with a financial advisor or estate planning attorney.

Choosing a professional who specializes in eldercare and/or long-term care planning can be very helpful. They are well versed in an array of options about which you may not be familiar, such as reverse mortgages, life insurance conversion, Veterans Benefits and more. When you meet with this person, be sure to cover the following:

  • Insurance options
  • Pension, retirement benefits, and personal property that may be potential income
  • Programs in which you are eligible
  • Potential tax deductions
  • Analyzing investment portfolio with our loved one’s long-term needs in mind 

As you continue your family discussion about how to budget for senior care, remember that at Senior Star, we are here to help you. Our eldercare advisors are available to discuss options with you, as well as acquaint you with the supportive care options available in our senior living communities. 

Serving with excellence is the cornerstone of everything we do at Senior Star. 

With multiple locations providing varying levels of care, our associates are passionate about making our senior living communities a safe and happy home for all of our residents. Contact us. And download our free guide “A Family Guide to Funding Senior Care & Housing” for more helpful information.


Click here to access our Guide to Funding Senior Care & Housing