Independent living communities (IL) provide the lowest level of assistance on the elder care spectrum. Sometimes referred to as retirement communities or senior housing, independent living communities are the best fit for self-sufficient elders in fair health who wish to minimize their daily responsibilities, socialize with peers and lead active lives.

The cost of independent living communities can vary widely depending on geographic location, dwelling type, the extent of services and types of amenities offered, and whether a resident wishes to rent or buy. According to the American Seniors Housing Association, independent living costs can range between $1,500 and $6,000 per month.

Independent living communities offer plenty of services and amenities, including laundry and housekeeping services, covered maintenance, landscaping, on-site dining facilities, transportation, and social and recreational activities. However, unlike other types of residential care, such as assisted living facilities and nursing homes, independent living communities do not provide assistance with activities of daily living or medical care. For this reason, independent living is not covered by insurance like Medicare or Medicaid and is instead paid for out of pocket by residents.

When considering a move to a 55+ community, note that costs are often divided into two categories. Housing costs within the community or facility are handled much like housing in the general real estate market. The cost of renting or owning an apartment, townhouse or home within the community will vary according to the local housing market. Second to this cost is a monthly, quarterly or annual activity/maintenance fee. Depending on the level of amenities and extent of activities offered, communities could charge fees ranging from a few hundred dollars to thousands of dollars a month.

Ways to Pay for Independent Living

  • Personal funds: Most seniors use their income and retirement savings to pay for independent living. In fact, many seniors choose to downsize from their longtime homes and use the proceeds from this sale to buy or rent an apartment or townhome in an independent living community. Other sources of funds include distributions from retirement accounts, income generated by investments, such as interest and dividends, and liquated assets.
  • Social Security benefits and pensions: Elders receiving Social Security retirement benefits and other types of pensions can use this income to help cover independent living expenses.
  • Annuity payments: An annuity is a type of insurance that is often used as part of a retirement-funding strategy. An initial investment in an annuity entitles the investor to some form of future payment, which can be scheduled on an annual, quarterly or monthly basis, or delivered as a lump sum. The amount of money an individual receives from an annuity depends on the amount of their initial investment and whether the future payout amount is guaranteed (a fixed annuity) or is dependent on the performance of the annuity’s core investments (a variable annuity).
  • Housing assistance: The U.S. Department of Housing and Urban Development (HUD) offers several different programs aimed at helping low-income seniors find safe and affordable living arrangements. Assistance may come in the form of public housing, rental assistance or vouchers. These programs can be used to help a senior live independently (some offer additional services and amenities), but they tend to have long waiting lists. The HUD website offers additional information on housing assistance programs for the elderly and disabled.
  • Supplemental Security Income (SSI): Seniors (aged 65 and older) and individuals who are blind or disabled who have limited income and assets may be able to receive SSI benefits to help cover the costs of basic needs like food, clothing and shelter. SSI benefit amounts are based on an applicant’s income, living arrangements and other factors. SSI payments can be used to help cover the costs of independent living. For more information on SSI specifics, see the “Understanding SSI” page of the Social Security Administration website.

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