The Average Cost Of Senior Living (2023)

Many factors can contribute to the cost of senior living, shares Beau Herman, a Florida-based certified senior advisor and owner of Assisted Living Locators Orlando Northeast.

According to Herman, some of the main factors that influence cost include:

• Location. Location has a drastic impact on senior living costs. Prices vary by state, county and even locale within a city.
• Overall cost of living. As the overall cost of living rises in particular location, so does the cost of senior living. What’s more, many facilities increase rates annually to account for inflation.
• Type of facility. Some facilities offer continuing care, which allows residents to age in place, from independent living to assisted living to memory care. However, other facilities exclusively offer one specific level of care.
• Health care needs. A person’s specific care needs depend on how much assistance they require throughout the day. Senior living staff determine these needs prior to a resident’s admission and adjust them as needed, whether due to increased age, an injury, illness or other factors.
• The size and style of senior living facility. Larger communities that offer more amenities and resources tend to cost more than smaller communities that provide the same level of care.
• Amenities. Communities that offer deluxe entertainment options, such as a pool and a robust activity program, generally cost more than communities that only offer basic options like puzzles and board games.

Although selecting a community that offers the appropriate level of care is crucial, it’s also important to find a community where you or a loved one feel at home. Over time, specific needs and preferences may change, along with associated costs, adds Herman.

Location is an essential factor to consider when discussing the cost of senior living, says Herman. “The cost of senior living is directly proportional to the cost of real estate,” he adds, explaining that prices tend to be higher in cities and other highly populated areas compared to rural areas.

“Prices may vary by state and even by city or town within a state,” adds Amy LaGrant, a gerontologist, Alzheimer’s Association Tennessee Chapter board member and TEDx Franklin speaker.

For example, the median cost of a private, one-bedroom apartment in an assisted living facility in Alaska in 2023 is $6,830 per month compared to just $3,000 per month in Missouri, according to Genworth’s Cost of Care survey^[1]Cost of Care Survey. Genworth. Accessed 5/3/2023. .

“As the costs for supplies, food and even health care workers increase, those costs pass on to the residents of senior care facilities,” says Natali Edmonds, Psy.D., a board-certified geropsychologist and founder of Careblazers, a resource geared toward providing accurate information to those caring for someone with dementia.

To help counteract inflation, Social Security and Supplemental Security Income (SSI) benefits undergo an annual cost-of-living adjustment (COLA), which was put in place to ensure these benefits are maintained regardless of inflation. In 2023 Social Security and SSI beneficiaries received an 8.7% COLA compared to a 5.9% adjustment in 2022 and 1.3% adjustment in 2021. In fact, the 8.7% increase is the highest COLA received in over 40 years^[2]Cost-of-Living Adjustment (COLA) Information. Social Security Administration. Accessed 5/3/2023. .

“Most senior living communities have written into their contracts that there’s an annual cost of living adjustment around 3% to 7%,” says Herman. However, following the inflation seen in recent years, many senior housing communities increased their rates between 10% and 15%, which outpaced the 8.7% increase most older adults saw in Social Security, adds Herman.

There are multiple levels of care available for older adults depending on their individual needs, says Dr. Edmonds. Some of the most common options include:

• 55-plus communities
• Independent living
• Assisted living
• Memory care
• Skilled nursing care

The required care level is based on how much assistance a resident needs with activities of daily living (ADLs), such as bathing, dressing and eating, as well as medical attention the resident may need or even the availability of nurse-led care, explains LaGrant.

“The more oversight and hands-on care the individual needs, the more expensive the care tends to be,” adds Edmonds. As a result, 55-plus communities and independent living are generally lower in cost than memory care and skilled nursing care, which require more hands-on assistance and advanced training for staff.

As a person ages, the cost of their health care tends to increase as well. According to the Kaiser Family Foundation’s 2019 Medical Expenditure Panel Survey, individuals ages 65 and over contributed 35% of the total health care spending in the U.S. but made up only 17% of the total population. Many older adults also reported experiencing difficulty affording their health care^[3]How do health expenditures vary across the population?. Peterson-KFF Health System Tracker. Accessed 5/4/2023. .

Dr. Edmonds explains that senior living residents can also be affected by rising health care costs, as the cost of care within these communities is largely dependent on the resident’s specific needs. During the admission process, each resident is evaluated to determine the level of care required and the associated costs for that care.

“The cost of these senior living communities can vary within the same care level based on individual needs. For example, someone in independent living who is able to take their medications independently typically pays less than an individual in the same place who needs someone to administer their medications,” says Dr. Edmonds. She adds that aging often coincides with additional care needs, which results in a higher monthly rate—or may even require a move to a facility that offers a higher level of care and comes at a higher price.

Aside from the overall increases in cost of living and health care expenses nationwide, older adults often experience additional financial burdens. “The biggest challenge older adults face is inadequate savings during their pre-retirement years,” says Herman.

“As we live longer, our retirement savings dwindle, making securing a stable future increasingly difficult. Inflation and the high cost of health care have made this struggle even more challenging,” adds LaGrant. Unfortunately, this financial strain often has a cascading effect on families.

“In many cases, family members have to cover the cost of senior living, which puts a strain on the family—both on their finances and their relationships. Many families, even those without significant financial resources, may not qualify for financial assistance until they ‘spend down’ or get rid of a certain level of assets, such as their home,” says Dr. Edmonds.

This stark reality makes planning, communication and close coordination all the more important between older adults and their families. Financial conversations and considerations aren’t always easy to talk about, but it’s a crucial topic families should discuss—ideally, before someone makes a move to senior living.

“While financial setbacks are more daunting to [older adults] because of their inability to make up for lost finances, the true impact isn’t necessarily an increased cost of senior living—it’s actually a reduction in senior living options,” explains Herman, who highlights the lack of affordable or subsidized senior living options in many areas. “Once an [older adult] can no longer pay for their living situation on their own and require public assistance, they’re relegated to public living options, which may not offer the same amenities [they had] previously.”