Assisted Living

For most seniors, the cost of assisted living is more than what they receive from Social Security. According to Genworth’s 2019 Cost of Care survey, the average monthly cost of assisted living is $4,051.00, or $48,612 per year. Where you live matters, though. The cost of living in an assisted living facility varies in different parts of the United States. In Missouri, the average monthly cost is $2,881, or $34,566. In Arkansas, expect to pay, on average, $3,175 per month, or $38,000 annually. On the other end of the scale, New Hampshire’s assisted living facilities cost, on average $7,021 per month ($84,255 annually), and New Jersey’s average monthly cost is $6,400 ($76,800 per year).

The average monthly Social Security payment in 2020 is $1,503.00, which comes to $18,036 annually. Of course, Social Security benefits vary based on your lifetime earnings in work in which you paid Social Security taxes. They also vary based on how old you are when you retire. Retirees who earned more money while working, and worked longer, get more Social Security benefits. There is a cap on how much income Social Security takes into account when calculating someone’s benefits. In 2019, that cap was $137,700. Any income above that amount is not taken into account when calculating benefits. The maximum Social Security benefits a retiree – who files in 2020 at full retirement age – can get is $3,011 per month. This comes to $36,132 per year. With that maximum amount being close to the lowest average assisted living costs in the country, this means that most retirees will need to supplement the cost of assisted living, whether it’s from income from a pension, a 401(k), or other investments or savings.

Optional State Social Security Supplements

In some states, some seniors living in assisted living may qualify for Optional State Supplements (OSS). These are benefits, based on income, available for people living in assisted living facilities or adult foster care, to help pay the room and board costs at those facilities. If a senior qualifies for Supplemental Security Income benefits, or SSI benefits, they might be eligible for OSS benefits. OSS benefits are distributed on top of SSI benefits. Recipients don’t get the payments, though, like they do with Social Security and SSI. The money from OSS payments goes straight to the assisted living facility.

Both eligibility rules and amounts of available OSS benefits vary by state. If a state offers the OSS benefits, the state sets its own eligibility requirements. The requirements are usually based on income. In most states that offer OSS, if a senior’s income level is below the federal requirements for receiving SSI benefits, they probably meet the state’s requirements for OSS benefits, too. In 2019, to qualify for the federal SSI benefit, individuals had to have an income of less than $771 per month.

Location Matters

Some states, such as Alabama, Kansas, Mississippi, and Washington don’t even offer any OSS benefits. In states that do offer the benefits, the amounts vary quite a bit. For example, in 2019, Minnesota’s benefits were $250 per month. New Jersey offered $210 per month, and Rhode Island offered $332. Kentucky offers one of the most generous benefits, at $520 per month. How states regulate and define assisted living, residential care, and group homes also varies.

To ensure that more seniors can afford assisted living, some states, like Ohio and Indiana, cap the amount that assisted living facilities can charge for room and board to match the federal SSI benefits. This means that if a senior in assisted living qualifies for federal SSI benefits, they can use that money to pay for the assisted living room and board charges. Not all facilities have to follow this cap, though. Only assisted living facilities that accept Medicaid are subject to the cap. If a facility doesn’t accept Medicaid, they can charge as much as they want. In addition, this cap only applies to room and board fees, not care costs. Some assisted living facilities charge extra fees for different levels of care.