Are you or a loved one on a limited income for retirement?
Here we will discuss 10 ways to save money on a limited income.
In today’s economy the cost of independent and assisted living is on the rise. There are fewer low-cost options and we’re living much longer, which means we need to find creative ways to make our retirement saving last. According to the Social Security Administration “A man reaching age 65 today can expect to live, on average, until age 84.3” and “a woman turning age 65 today can expect to live, on average, until age 86.6”.
These are just averages. “About one out of every four 65-year-olds today will live past age 90, and one out of ten will live past age 95”. The following link shows how life expectancy has changed over the years. Infoplease According to this data we’re expecting to live almost 20 years longer now than we were in 1930.
Who’d have known we’d live so long. If we’re lucky we’ve saved for the higher cost of independent and assisted living and will be well cared for as we age. There’s no magic ball to tell us how long we’ll live. We can, however, start planning on how we can make the most of the money we do have.
10 Ways to Save Money on Independent and Assisted Living Communities
- Floor Plan
Whether you’re considering independent or assisted living the floor plan you choose can make a big difference in cost. Typically these communities offer ample public space and activity rooms. Often times residents find a smaller private room is enough. For example, you can expect to reduce your monthly payment by 15% – 20% a month by selecting a studio over a one-bedroom apartment. This decision can add up to an annual saving of up to $8,000. According to our most recent census of assisted living homes in the Denver metro area the average cost of assisted living was $3,450 per month (this excludes adding levels of care).
- Shared Room or Apartment
Seeking a community that offers a shared room or apartment is another excellent opportunity to reduce your living expenses. While sharing a living space isn’t for everyone it may be perfect for someone who is social and enjoys the company. You can save 10% – 20% over a private room, which adds up to $4,000 – $8,000 per year. In addition to the saving a shared room or two-bedroom unit often times is much larger than a private room or one-bedroom apartment.
- Community Size
A person might think a larger community, due to economies of scale, could offer lower monthly rent and care services. This isn’t always the case. Depending on what state you’re looking there may be tighter regulations and higher licensure fees for larger communities vs. smaller communities. You may want to consider a smaller or residential home. Often times the overhead costs are much less than a large facility and can be much less expensive and offer the same level or better level of care.
- Look Outside the City
Due to the higher cost of real estate in urban areas, the same level and quality of care usually costs more. You can reduce your living costs by up to 25% by finding an independent or assisted living community as little as an hour away from a city center. In addition, the communities in suburban or rural areas tend to have significantly more personal space. You will find that many of the communities in urban areas are conversions of existing properties, which tend to be space limited.
- Look in Another State
Throughout the 50 states, you will find large cost variations in assisted and independent living communities, which partially has to do with different state regulations. Families with adult children may want to consider communities in neighboring states to save money. Use the Long Term Care Calculator from AARP to compare costs and types of services in your area.
- Time of Move
Like many other businesses assisted and independent living communities are subject to the same financial pressures and may offer prices breaks to move at the end of the month, end of the calendar quarter or their financial quarter.
If you’re not under any time pressure to move the timing of the move can result in significant savings. During these times, a community is much more motivated to negotiate the monthly rent or waive the community fee. They may also offer a move-in credit. Ask about move in specials. If they don’t have any and other nearby communities do use this information to negotiate a discount.
- Ask for a Reduced Price
If you’ve been a long-time resident of a community and find that you’re no longer able to afford the monthly rent or will run out of money sooner that you’d originally thought, don’t hesitate to ask for a price reduction.
In many states, there are regulations to protect consumers from being asked to leave when they can no longer afford their monthly rent or run out of money. However, in many states there aren’t. More and more communities are private pay only. Since we don’t know how long we’ll live it’s hard to know how long the money we’ve saved for retirement will last. Be proactive and ask for a price reduction of $300 – $500 a month if you’re worried you’ll run out of money before you’re ready to make a move. Most reputable communities that value their residents will work with the resident to keep them in their community, especially if there not at full occupancy.
- Ask About Average Occupancy Rates
Most assisted and independent living communities are required to maintain a certain occupancy level to optimize their operations. If a community is consistently running below their optimal occupancy rate they may become more willing to make concessions such as reducing the monthly rent, waiving the additional fee for added levels of care or offering move-in credits.
The community may not share this information with you directly. However, they will share this information with referral agencies such as Golden Heart Senior Care and private geriatric care managers. Working with a referral agency is free to the family and we can help you navigate through the process and save you money.
Looking at a new community is also a very good strategy. Typically communities have around a 10% vacancy whereas a new community has to fill 100% of its rooms. In addition to being in new condition, the management team may be willing to negotiate the community fee, waive the deposit or lower the monthly base rent. At Golden Heart Senior Care we’re often aware of new communities well in advance of the public.
- Level of Care
Every assisted living community will do an assessment to determine the “level of care” required by the resident prior to finalizing the service contract. The level of care stipulates the services required by the resident and the cost of these services. If a persons condition is changing rapidly you may want to consider a community that offers an all-inclusive package however if the level of care is minimal adding these cost on an as needed basis may save a lot of money in the long run. Choosing the correct level of care can save a family hundreds of dollars a month.
If you’re uncertain of the level of care required for you or a loved one you may want to consider working with a counselor from the Area Agencies on Aging or a private Geriatric Care Manager in advance of your search. You can locate resources on the Area Agency on Aging’s websites Network of Care. Here you will find programs and services related to older adults, adults with disabilities, and their caregivers.
An assessment will address the following:
- Bathing – the amount of assistance required and frequency
- Dressing – assistance dressing themselves and choosing the appropriate clothing for the weather
- Grooming – assistance brushing one’s hair and teeth and, for men, with shaving
- Mobility – assistance transferring to and from a wheelchair and with mobility
- Continence – assistance managing continence
- Generalized Behavior – such as wandering and resistance to assistance
- Eating – assistance with the selection of foods and the physical effort of feeding oneself.
- Medications – distribution and supervision of medicine including frequency and the delivery method, the number of medications, and oral vs. injection
- Housekeeping and Laundry services
- Dementia – additional monitoring and assistance for patients with dementia
- Prescription Drugs from Canada
This discussion is simply to examine the subject from and economic and procedural perspective not to advocate for or against obtaining prescription drugs from Canada.
It’s generally well known that purchasing prescription drugs from other countries such as Canada can save a person lots of money per month. Prescription drug prices from Canada and other countries can be on average of 25% to 50% less than the US.
Although each pharmacy differs the process is generally the same. A person mails, faxes or emails the prescription, pays with a credit card and receives the medication by mail within a few weeks. Because of the length of time needed to fill a prescription using a Canadian pharmacy may be more appropriate for those with long-term medicinal needs.
If you’re interested check out this article from the Wall Street Journal which looks at why the us pays more than other countries for drugs.
You can also compare prices of medications at different Canadian and US pharmacies at this website that tracks medication costs to see if using a Canadian pharmacy would benefit your family.
May you enjoy peace, love and happiness,