Financial Resources For Affording Senior Living

Choosing the perfect senior living community is an important decision—and for many families, one of the first questions is: “How do we afford it?”

Whether you’re considering independent living or assisted living, understanding your financial options can ease the process and help you make confident choices for the future. While senior living is a significant investment, there are many resources and strategies available to make it more affordable than you might think.

In this blog post, we’ll explore the most common ways to pay for senior living and tips to help you plan ahead.

We encourage you to download our full Financial Resource Guide, or our Financial Calculator Worksheet to help you understand and break down the true cost of senior living.

1. Private Pay (Out-of-Pocket)

Most families begin with private funds—savings, income, or help from family. This can include:

Retirement income (such as pensions, social security, or annuities)
Social Security benefits
Investment income (such as 401(k)s, stocks, bonds, CDs and other investments)
Proceeds from the sale of a home or other assets

Private pay is the most flexible payment option, especially for independent living communities that don’t involve medical care. For families who can budget monthly expenses from personal resources, this is often the starting point in affording senior living.

2. Long-Term Care Insurance

Long-term care insurance is designed to help cover the costs of senior care, but policies vary in what they include—and what they don’t.

If you or your loved one has a long-term care insurance policy, it may cover a portion of assisted living costs. These policies are designed to help pay for non-medical services like help with bathing, dressing, and other daily activities.

Key tips:

Review the policy’s coverage terms and daily benefit amounts.
Contact the insurer early in the process to understand how to file a claim.
Most policies have an “elimination period” before benefits begin, so plan accordingly.

Long-term care insurance won’t typically cover independent living, but it can significantly offset assisted living expenses for those who qualify.

3. Veterans Benefits (VA Aid and Attendance)

For veterans or surviving spouses, the VA Aid and Attendance benefit can be a powerful financial resource. This tax-free monthly payment is designed to help pay for care in assisted living communities.

To qualify, applicants must:

Be a wartime veteran or the surviving spouse of one
Meet income and asset limits
Require assistance with daily living activities

As of 2025, eligible veterans may receive over $2,000 per month in additional benefits, depending on marital status and care needs. This can go a long way toward covering the cost of care.

Tip: Navigating the application process can be complex, but many senior living communities or VA-accredited representatives can assist you. You can visit www.aidandattendance.com to learn more about your qualification.

4. Selling or Renting a Home

For many seniors, their home is their most valuable asset. Selling a home can provide a significant lump sum to fund senior living for several years. Some families opt to rent out the home, providing ongoing monthly income to help cover living costs.

Benefits of selling:

Immediate access to cash for move-in costs and ongoing care
Less burden of home maintenance or property taxes

Benefits of renting:

Keeps the property as an asset
Provides consistent monthly income

A financial advisor or senior real estate specialist can help evaluate the best option based on your unique situation.

5. Bridge Loans and Short-Term Financing

When transitioning to a senior living community, your home’s equity may be one of your most valuable assets. Selling your home at the best possible price can provide significant funds to support your senior living expenses. If you are needing to sell your home, we recommend working with a Senior Real Estate Specialist® (SRES®), which is a Realtor® with specialized training in assisting older adults through the home-selling process.

Keep in mind that bridge loans are also available or short-term financial assistance while you wait for your home to sell.

6. Life Insurance Conversion

Did you know some life insurance policies can be converted into a long-term care benefit plan?

Here’s how it works:

The policyholder sells or “converts” their existing life insurance policy
The value is turned into a monthly benefit payment that can be used for senior living expenses

This option—sometimes called a life settlement or life insurance conversion—can help seniors tap into a financial asset they may not have considered.

Be sure to consult with a financial advisor to determine if this option is right for your family and to ensure there are no tax implications or hidden fees.