When considering senior living, one of the main issues that families have to deal with is the cost of assisted living. Since there are various sources of funding such as Social Security, Medicare, long-term care insurance, tax deductions, and personal savings, it’s often unclear how all these elements fit together.
The good news is that you don’t have to rely on just one way to pay. Most families use a mix of financial resources, such as retirement income, Social Security benefits, personal savings, insurance, and other assets.
In this guide, we’ll explain how to pay for assisted living, what Medicare and Social Security cover, and several financial options that can make future planning feel more manageable.
What Does Assisted Living Actually Cost?
It helps to know what assisted living actually costs before you look at different ways to pay for it.
According to CareScout’s 2025 Cost of Care Survey, published in 2025, the national median cost of assisted living was $6,200 per month, or $74,400 per year. That number has risen steadily, up from $61,165 in 2022, and costs are expected to continue climbing into 2026.
In the Virginia Beach metropolitan area, the 2025 median monthly cost was $6,525, or about $78,300 annually.
Not every community structures pricing the same way. Some include dining, housekeeping, transportation, and other amenities in one monthly fee, while others charge separately for additional services. Understanding what’s included can make it easier to compare communities and build a realistic financial plan.
Private Pay: The Most Common Starting Point
For most families, private pay is the primary way to cover assisted living costs. Rather than relying on a single income source, many people use a combination of retirement savings, monthly income, and personal assets to create a plan that works for them.
Common private pay sources can include:
- Personal savings and retirement accounts: Funds from a 401(k), IRA, or pension can be drawn down over time to cover monthly assisted living costs.
- Investment income: Dividends, interest, and portfolio withdrawals are another common source of ongoing income that can help offset monthly costs.
- Home equity: For many older adults, the family home represents a significant asset. Selling the home, taking out a home equity line of credit, or exploring a reverse mortgage can free up funds for assisted living.
- Sale of personal assets: Vehicles, collections, jewelry, and other properties are sometimes sold to help cover care costs.
Private pay gives families the most flexibility and typically opens the door to the widest range of options. Most families start with private sources and layer in additional funding streams over time as needed.
Social Security
For many retirees, Social Security provides an important source of monthly income. While it usually isn’t enough to cover the full cost of assisted living on its own, it can play a significant role in helping pay for other monthly expenses.
There are a few different types of Social Security benefits that may apply.
Social Security retirement benefits
The most common type, these monthly payments can be applied directly toward assisted living costs. The average Social Security retirement benefit in January 2026 was approximately $2,071 per month, which covers a portion of the national median assisted living cost.
Social Security Disability Insurance (SSDI)
Social Security Disability Insurance is available to those under full retirement age with a qualifying disability and sufficient work history.
Supplemental Security Income (SSI)
A needs-based program for seniors with limited income and assets, SSI can help offset costs for those who qualify.
For Virginia residents, there’s an additional financial advantage.
Virginia does not tax Social Security income, which means those benefits go further here than in many other states. Combined with additional retirement income deductions available to residents 65 and older, Virginia’s tax environment can stretch a fixed income when planning for assisted living costs.
Medicare Coverage
The short answer is no. Medicare does not cover the cost of assisted living, including room, board, or personal care services like help with bathing, dressing, or medication reminders.
However, Medicare does cover certain healthcare services while someone lives in an assisted living community, including:
- Doctor visits and approved medical treatments
- Short-term skilled nursing care following a qualifying hospital stay of at least three days
- Physical therapy and rehabilitation services
- Certain home health services provided by licensed professionals
While Medicare remains an important source of health insurance, families should expect to use other financial resources to cover the day-to-day cost of assisted living.
Long-Term Care Insurance
Long-term care insurance is designed to help cover the cost of long-term support, including assisted living. Depending on the policy, benefits may be paid daily or monthly to help offset qualifying care expenses.
Coverage varies by provider, and benefits may depend on factors such as needing assistance with activities of daily living (ADLs) or meeting a waiting period before payments begin.
A few things to consider:
- Buy early: Premiums are often lower when purchased in your 50s or early 60s.
- Review existing policies: Some people already have coverage through a former employer or policy purchased years ago and may not realize it.
- Life insurance as an alternative: Some life insurance policies can be converted or surrendered to help fund long-term care costs.
Veterans Benefits
For eligible veterans and their surviving spouses, VA benefits can provide financial support toward assisted living costs, though this resource often goes untapped.
Two Veteran Financial Benefits:
- VA Aid and Attendance benefit: A monthly, tax-free payment available to eligible veterans and surviving spouses who need help with daily activities such as bathing, dressing, or medication management. This benefit can be applied directly toward assisted living costs.
- VA pension: Additional monthly income available to wartime veterans who meet certain income and asset requirements.
If you or a loved one served in the military, contact the VA or a Veterans Service Organization to find out what may be available.
Tax Deductions
Some assisted living expenses might be tax-deductible. Not every cost qualifies, but knowing the rules can help lower your overall expenses.
If a resident meets the IRS definition of being chronically ill, meaning they need assistance with at least two activities of daily living (ADLs) or require supervision due to cognitive impairment, the medical or care-related portion of assisted living costs may qualify as a deductible medical expense.
A few key points:
- What qualifies: Only the medical and personal care portion of assisted living costs is deductible, not room and board.
- Claiming a parent as a dependent: Adult children who pay for at least half of a parent’s support may be able to claim that parent as a dependent and deduct eligible medical expenses on their own tax return.
- IRS Publication 502: This document covers medical and dental expense deductions in detail and is a helpful starting point for understanding what may qualify.
How To Pay For Assisted Living: Comparing Your Options
There isn’t a single “right” way to pay for assisted living. Most families combine several of these resources to create a financial plan that fits their needs.
| Payment Option | Can It Help Pay for Assisted Living? | What to Know |
|---|---|---|
| Private pay | Yes | The most common funding source, using savings, retirement accounts, investments, or home equity |
| Social Security | Yes | Provides monthly income that can help offset assisted living costs but rarely covers the full amount |
| Medicare | No | Covers approved medical services, not room, board, or personal care |
| Long-term care insurance | Often | May help pay for assisted living if your policy includes this coverage |
| Veterans benefits | For eligible veterans | VA Aid and Attendance and certain pensions may help offset costs |
| Tax deductions | Potentially | Some medical and care-related expenses may qualify for tax deductions if IRS requirements are met |
Planning Ahead Makes a Difference
One of the best ways to prepare for assisted living is to start planning before it’s needed. Having time to organize finances, review insurance policies, and explore different communities gives families more choices and reduces the pressure of making important decisions during a health crisis.
Many financial professionals recommend beginning these conversations in your 60s or as soon as long-term care becomes part of your retirement plans. It can also be helpful to work with a financial advisor or elder law attorney to understand how your income, assets, and insurance coverage fit into your overall plan.
Taking a proactive approach today can make the transition to assisted living smoother for everyone involved.
Understanding Your Options at Atlantic Shores
Atlantic Shores is the only retirement community in the region that offers both equity ownership and rental options, giving residents and families flexibility in how they plan and budget for the future. From assisted living apartments to a full continuum of care on one campus, there are options designed to fit a range of financial situations and long-term goals.
If you’re trying to get a clearer sense of what assisted living at Atlantic Shores might cost for your specific situation, the Floor Plan Cost Calculator is a good place to start. It allows you to explore available floor plans and get a realistic cost estimate based on your preferences.
If you’d like to talk through your options with someone directly, our team is here to help. Schedule a visit or reach out to learn more about what life at Atlantic Shores looks like.
