Paying for caregivers for a loved one because they develop health or mobility issues is expensive. Seventy-seven percent of adults 50 or older prefer to stay home as they age. The problem is that staying home with a caregiver may not be financially feasible, and moving to a facility is expensive too. The caregiver’s cost and how to pay for a caregiver need to be examined.
In 2020, the median cost of in-home care services was about $24 per hour. Remember that the hourly rate varies depending on location and available professional caregivers. Therefore, in areas like Louisiana, where the cost of living is lower, and there are more available caregivers, the median cost is $17 per hour for care. Assuming the person works 40 hours per week, the cost is $680 weekly, $2720 monthly or $35,360 annually. On the other hand, if a person lives in a more expensive area or there are less accessible qualified caregivers, the median hourly rate ranges from $26 – $33 per hour. Again, assuming the person is working full time, a caregiver is paid approximately $1160 per week, $4640 per month, or $60,320 per year.
Yes, there are options other than in-home care. The most affordable option is adult daycares, non-residential facilities designed to provide care and companionship for older adults. Depending upon the location, the hourly rate ranges from $9 to $35 per hour for an 8-hour day.
There are assisted living residences or continued care retirement communities. The median cost of assisted living in the U.S. is $4,500 monthly or $54,000 yearly. Again, it depends on location and residence since some facilities charge $8000 monthly. These costs do not include any additional care such as dressing, bathing, toileting, or medication management. Places will evaluate the resident to determine the level of care needed, which will increase the monthly fee. If memory care placement is required, the additional costs are approximately 20% to 30%.
Another option is a Board and Care facility. On average, the cost of a board and care ranges from $2500 to $5000 a month, depending on the care needs, the quality of the accommodations, and the location. An alternative is a private residence that specializes in care for individuals. The costs can range from $3,000 for a shared bedroom and $4000 to $7000 per month for a private room. Depending upon location, the cost of care can go up to $10,000 per month.
How to pay for caregivers?
There are several options for paying for care. Of course, it’s best to plan by investing, putting money aside, or purchasing a long-term care or annuity policy. Contact a financial advisor or life insurance agent/broker for options that might be best for you. Meanwhile, this is how most people pay for care:
Out of pocket, where the individual or family members choose to pay for the services themself