New Study Shows Assisted Living Is More Affordable than Aging in Place

South Dakota has lowest annual cost for assisted living and highest costs for aging in place in any US state

Deciding whether to age in place (growing older at home) or move to an assisted living community is one of the biggest financial choices that seniors and their families can face. The costs vary widely by state, affected by factors like housing prices, home repair costs, the cost of home health care, utilities, groceries, and taxes.

A new study by Caring shows older adults can save tens of thousands of dollars by choosing assisted living communities over aging in place in their homes in the greater community.

The study compared information on costs related to food, home health aides, property taxes, insurance, utilities and home maintenance against the annual cost of assisted living. Aging in place safety in a traditional home setting often requires making important but costly home modifications, such as adding stair lifts and walk-in tubs. Older adults also must factor in the increasing cost of food, insurance and home maintenance.

South Dakota residents who opt for assisted living stand to save the most — $81,768 in the first year and $69,318 each year thereafter. Caring attributed those savings to the state having the lowest annual cost for assisted living in the nation — $52,200 annually — but the highest costs for aging in place in the greater community.

Hiring a home health aide, for example, would cost a South Dakota resident $100,672 annually, the highest rate in the country. And although home-related expenses such as property taxes, utilities and home maintenance are lower there than the US average, homeowners’ insurance costs are one-third higher than the national average, according to the data. 

Utah came in at No. 2 in cost savings for assisted living versus aging in place in the greater community. On average, Utah residents save $68,871 in the first year of a move to assisted living and $56,421 thereafter. The state is among the top five for lowest annual cost of assisted living, with residents paying a median of $56,220.

In comparison, a home health aide would cost $86,944 annually in Utah. Food and home maintenance costs also are significantly above the national average, according to the data. 

Colorado landed at No. 3 among the lowest-cost states for assisted living, with residents saving $67,339 in the first year after a move, followed by $54,889 in subsequent years. Caring found that the total cost of living at home in Colorado was $125,410 annually. The state also has higher than national average costs for homeowners insurance, annual home maintenance and a home health aide.

Rounding out the top 10 states where the cost of moving into assisted living is below aging in place in the greater community were No. 4 Minnesota, where the annual cost of assisted living was $69,900 compared with the annual cost of $120,329 to age in place; No. 5 North Dakota ($64,020 for assisted living versus $110,899 for aging in place); No. 6 Nebraska ($61,416 versus $107,391); No. 7 Iowa ($62,202 versus $108,164); No. 8 Idaho ($55,200 versus $99.749); No. 9 Montana ($73,605 versus $117,849); and No. 10 Washington state ($83,700 versus $127,147).

Alaska, Hawaii and Delaware are the only states where it is cheaper to opt for home modifications rather than move to an assisted living community. Alaskan older adults can save $8,033 in the first year by aging in place in the greater community and $20,483 each year thereafter.