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Assisted living offers aging adults a balance of independence and support with daily living activities (ADLs). By 2030, 73.1 million U.S. adults will be 65 or older, representing 21% of the population.
Currently, over 818,800 residents live in assisted living communities spread across 30,600 facilities. The average cost is $4,500-5,500 monthly, while nursing homes cost $108,405 annually. As demand grows, experts predict costs will rise, and the country will need two million senior housing units by 2040.
This article includes statistics on the increasing trends in assisted living in the U.S., average costs, and options for yourself or your loved one.
Key Insights
There are more than 818,800 residents in assisted living facilities nationwide.
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There are 30,600 residential care communities in the U.S., with California having the largest assisted living communities, totaling 13,536.
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The national median costs for assisted living services are $4,500-$5,000 monthly and $66,200 annually.
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About 66% of people use their own retirement and savings funds to pay for care. Americans spend approximately $60 billion to self-fund extended care.
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Most caregivers are aged between 25-54 years old, with an average age of 51; 48% are women, 52% are men, and 14% are aged 65 or older.
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Assisted Living Statistics
Assisted Living is usually designed like home apartments with individual or shared rooms, where residents live together and receive different housekeeping and care services such as eating, toileting, bathing, walking, laundry, etc. In the U.S., 818,800 residents reside in assisted living facilities (ALFs). While 1.2 million beds are licensed for ALFs and other senior care facilities nationwide.
- The average age of assisted living residents is approximately 84 years, with 52% being over the age of 85 and only about 6% under 65.
- Approximately 2% of the senior population in the U.S. resides in ALFs, while 4% belong to nursing homes.
- According to AHCA NCAL, California has the most assisted living communities, totaling 13,536, while the District of Columbia has the fewest with just 16 communities.
- By 2030, 3.9 million seniors are predicted to live in assisted living facilities.
- Memory care facilities in assisted living will see rising demand in the coming years due to an increase in dementia cases in the country.
Assisted Living Services
- 24-hour supervision and assistance
- Exercise, health and wellness programs
- Housekeeping
- Meals and dining services
- Medication management or assistance
- Personal care services (such as Activities of Daily Living [ADLs])
- Transportation
- Healthcare services
Not all assisted living facilities offer the same healthcare services. The following is a breakdown of the percentage of facilities that provide a specific level of care:
Common Conditions of Residents
Assisted Living Eligibility Requirements
Every assisted living center has different requirements, but generally speaking, applicants must meet the following conditions to apply to live in an assisted living facility:
- Need assistance performing at least 2 activities of daily living (e.g., dressing, eating, using the toilet, hygiene, transitioning from bed to chair).
- Have predictable and stable mental and physical health.
Those who don’t qualify opt for nursing homes or other senior living options with skilled nursing facilities.
Average Length of Stay
The median stay in an assisted living facility is around 22 months. Most residents (60%) transition to a skilled nursing center or another type of senior facility as care needs intensify.
- 13% of people use assisted living for an average of less than 1 year
- 35% of people use nursing facilities for an average of 1 year
Assisted Living Demographics
The majority of residents in assisted living facilities are white women in their 80s. They also commonly have high blood pressure.
Age
Someone turning age 65 today has almost a 70% chance of needing some type of full-time long-term care services and support in their remaining years. One-third of today’s 65-year-olds may never need long-term care support, but 20% will need it for longer than 5 years.
Gender
Historically, there are more females than males in these communities. Women tend to live longer than men, with an average life expectancy that is about five years greater. This extended lifespan contributes to a higher likelihood of requiring long-term care services. (3.7 years vs. 2.2 years).
Race
Black older adults are less likely to move to assisted living and are more likely to move to a nursing home compared to white older adults. There are disparities in care for residents depending on their race.
Assisted Living Costs
The national median average of assisted living facility costs is $4,500-5,500 per month for one person and around $6,850 for a couple. This amount is expected to increase by 5.53% through 2030.
In general, the senior housing industry rent amounts increased by 5.3% in early 2023 compared to the end of 2022.
| Service | Monthly Cost | YoY Increase | Five Year CAGR |
| Assisted Living Facility | $4,500 | 4.65% | 5.53% |
| Nursing Home (Semi-Private Room) | $7,800 | 1.96% | 2.93% |
| Nursing Home (Private Room) | $8,910 | 2.41% | 3.25% |
| Memory Care | $5,625 | 4.65% | 5.10% |
| Homemaker | $26/hr | 10.64% | 5.39% |
| Home Health Aide | $27/hr | 12.50% | 5.92% |
| Adult Day Services | $78/Day | 5.41% | 2.78% |
Cost of Assisted Living vs. Nursing Homes
Assisted living = $54,000/year
Nursing homes = $108,405/year for a private room in 2021
Cost of Assisted Living vs. In-Home Care
- Assisted living = $54,000/year
- Homemaker Services = $59,488/year*
- Home Health Aide = $61,776/year*
* Figures are based on 44 hours of care per week for 52 weeks.
Assisted Living Cost Factors
- Private rooms vs. shared spaces (kitchenettes, lounges, private bathrooms)
- Size of the facility and the amenities available (pools, pharmacies, community outings, dining facilities)
- Location (region, state, city vs. rural)
- Number of beds available. (The average number of licensed beds is 33.)
- Specialized services offered (e.g., occupational and physical therapy, memory care)
- Staff-to-resident ratio (National law mandates a ratio of 1:8, but there are no state regulations for assisted living staffing.)
Assisted Living Costs and Availability by State
| State | Monthly Costs | Number of Beds | Number of Communities |
| Alabama | $3,503 | 9,700 | 300 |
| Alaska | $6,830 | 1,800 | 100 |
| Arizona | $4,000 | 24,900 | 1,400 |
| Arkansas | $3,760 | 5,800 | 100 |
| California | $5,250 | 12,700 | 5900 |
| Colorado | $4,750 | 14,600 | 400 |
| Connecticut | $5,129 | 1,700 | 60 |
| Delaware | $5,995 | 2,100 | 30 |
| District of Columbia | $6,978 | 700 | 10 |
| Florida | $4,000 | 75,100 | 2,400 |
| Georgia | $3,535 | 25,200 | 900 |
| Hawaii | $5,735 | 5,200 | 300 |
| Idaho | $3,838 | 8,300 | 200 |
| Illinois | $4,488 | 31,000 | 400 |
| Indiana | $4,283 | 20,300 | 200 |
| Iowa | $4,367 | 1,700 | 50 |
| Kansas | $4,580 | 12,100 | 400 |
| Kentucky | $3,448 | 12,500 | 200 |
| Louisiana | $3,748 | 5,300 | 100 |
| Maine | $5,865 | 6,500 | 240 |
| Maryland | $4,900 | 17,500 | 900 |
| Massachusetts | $6,500 | 13,600 | 300 |
| Michigan | $4,250 | 36,500 | 1,700 |
| Minnesota | $4,508 | 30,600 | 800 |
| Mississippi | $3,500 | 6,400 | 100 |
| Missouri | $3,000 | 19,900 | 400 |
| Montana | $4,450 | 5,900 | 200 |
| Nebraska | $4,076 | 11,300 | 200 |
| Nevada | $3,750 | 4,200 | 200 |
| New Hampshire | $6,053 | 4,800 | 100 |
| New Jersey | $6,495 | 21,300 | 200 |
| New Mexico | $4,498 | 4,200 | 100 |
| New York | $4,580 | 35,500 | 500 |
| North Carolina | $4,010 | 39,000 | 900 |
| North Dakota | $3,391 | 5,300 | 100 |
| Ohio | $4,635 | 42,800 | 600 |
| Oklahoma | $3,855 | 10,500 | 200 |
| Oregon | $5,045 | 31,500 | 1,500 |
| Pennsylvania | $4,100 | 62,900 | 1,000 |
| Rhode Island | $6,826 | 3,900 | 50 |
| South Carolina | $3,612 | 12,300 | 300 |
| South Dakota | $3,350 | 4,600 | 100 |
| Tennessee | $4,105 | 17,400 | 300 |
| Texas | $3,998 | 48,700 | 1,300 |
| Utah | $3,500 | 7,100 | 200 |
| Vermont | $5,250 | 2,400 | 90 |
| Virginia | $5,250 | 26,400 | 400 |
| Washington | $6,000 | 41,500 | 2,000 |
| West Virginia | $4,160 | 3,600 | 50 |
| Wisconsin | $4,600 | 36,100 | 1,500 |
| Wyoming | $4,169 | 800 | 20 |
How to Pay For Assisted Living Costs
Does Medicare Cover Assisted Living Costs?
Medicare does not cover long-term care services and supports. However, it may help cover things within an assisted living facility, such as transportation to doctors’ appointments or some preventive health services.
Medicare Advantage and Medicare Supplement (Medigap) plans also do not cover assisted living costs.
Using Medicaid
For people with limited income and resources, State Medicaid programs can cover home and community-based services (HCBS), such as personal care and supportive services provided in assisted living communities. Medicaid does not pay for room and board costs.
To qualify for Medicaid in your state, you must:
- Live in a Medicaid-licensed assisted living facility (48% of AFLs have Medicaid certification)
- Meet financial eligibility criteria, which vary by state
- Demonstrate a need for assistance with daily living activities
Using Long-Term Care Insurance or Life Insurance
Long Term Care Insurance (LTCI) provides financial coverage under some plans to help pay for long-term care services needed at home or senior living facilities like assisted living.
- Annual premiums for a singles or couples policy range from $950 to $8,575, depending on the plan type, if you purchase a long-term care insurance policy valued at $165,000 at age 55. Costs can rise to as much as $9,675 if you buy the policy at age 65.
- The average claims amount paid is just over $142,000.
Life insurance policies that include chronic illness riders or long-term care riders, can leverage the policy to cover assisted living expenses. Policyholders could also access the accelerated death benefits or consider a life settlement.
Using Veterans Benefits
The VA does not cover the rent, which usually includes basic services. However, the VA may pay for some of the extra services the Veteran may need in an assisted living facility. Veterans may also be able to have the VA arrange for a health professional (e.g., a nurse) to visit and give them extra care.
The VA long-term care services include:
- 24/7 medical and nursing care
- Physical therapy
- Assistance with ADLs like bathing, dressing, meal preparation, and medication
- Pain management and comfort care
- Assistance for caregivers needing skilled relief, giving them time to work or travel.
Some services are covered under standard health benefits if you’re signed up for VA health care. You may still need to pay a copay for some covered services.
In certain cases, some veterans may qualify for Aid & Attendance, a government-funded program by the U.S. Department of Veterans Affairs (VA) that may give financial coverage for assisted living facilities.
Private Pay
Most commonly, Americans self-fund their extended care to the tune of $60 billion. Sixty-six percent of caregivers use their own retirement and savings funds to pay for care.
Are Assisted Living Costs Tax Deductible?
Some medical expenses associated with assisted living are tax deductible. Medical expenses that are more than 7.5% of your adjusted gross income (AGI) qualify for the medical deduction. Generally speaking, meals and lodging are not deductible.
To deduct a portion of assisted living costs on your taxes, you must meet the following criteria:
- Declared Chronically ill by doctors, i.e. unable to perform more than 2 daily living activities (eating, transferring, bathing, dressing, and continence) without caregiver assistance.
- Have severe cognitive impairments like dementia or Alzheimer’s, so need continuous supervision.
- You receive a care plan from your doctor or the caregivers in the community.
In addition, some durable medical equipment and devices are also eligible, like hearing aids, oxygen equipment, and prescription medications.
Caregiver Statistics
Caregiver professions are in high demand, despite the large need for qualified caregivers in the industry.
There were 3,636,900 professional home health and personal care aides in 2021. By 2031, the caregiving profession is expected to grow by 25% (924,000 jobs), much faster than average.
Unpaid family caregiving is on the rise, with 80% of at-home caregivers being unpaid —especially for aging seniors. More than 41.8 million unpaid caregivers care for people over the age of 50.
The Time Spent Caring for Loved Ones is Equivalent to a Part-Time Job
A pre-pandemic, 2020 study by the National Alliance for Caregiving and AARP found that nearly 48 million Americans provide some form of care to older adults, and 61% of them juggle jobs with it.
On average, caregivers spend 23.7 hours a week giving care to someone they don’t live with. This number rises to 34.7 hours a week if the caregiver lives with their care recipient.
- 58% have intensive caregiving responsibilities such as assistance with ADLs, medication management, etc.
- In a survey by S&P Global, about 34% of respondent caregivers find balancing job responsibilities with caregiving duties as their biggest source of stress.
- Inflation is making it significantly harder for 28% of caregivers to manage care, especially for those dedicating over 21 hours weekly.
Who Commonly Takes On the Role of Caregiver?
- 14% of caregivers are 65+ themselves
- 48% of caregivers are women, 52% are men
- 54% of caregivers are between the ages of 25 to 54 with an average age of 51
16% of enrolled college students are caregivers to adults. Black and Hispanic college students are more likely than White and Asian students to be caregivers. They’re also more likely to be working while in school.
Caregivers, regardless of age, are more likely to be lower-income and/or financially insecure. Many people juggle full- or part-time work in addition to their caretaking responsibilities. As such, workers in lower-income households are 54% more likely to be caregivers than those in higher-income households.
Demographics of Caregivers vs. Residents
Most caregivers are women (48%), while the majority (72%) of assisted living residents are women. While caregivers are an average of 51 years old, while residents are typically 60+.
Caregiving is a Long-Term Commitment
The average length of time a caregiver provides unpaid care to a loved one is 4.5 years. The number of people providing care for five years or longer was 28% in 2020, though this number will likely grow as life expectancies rise.
Assisted Living Facilities and COVID-19
- Throughout the pandemic, COVID-19 cases were more common in assisted living facilities.
- More ALF residents with COVID-19 died compared to the general population, and long-term-care facility deaths made up over one-third of all U.S. deaths (including nursing homes, assisted living, and other long-term care facilities).
- In 2021, about 8% of people who live in US long-term-care facilities died of COVID-19—nearly 1 in 12.
- The pandemic dropped senior housing occupancy rates by 9.2% as many people opted for alternative living arrangements.
- Assisted living costs increased as a result of COVID-19 due to labor shortages (challenges with recruitment and retention of staff, high turnover), the need for increased training and regulations, and extra PPE costs.
Assisted Living Trends and Predictions
The Assisted Living Industry Will Continue to Grow at an Astonishing Rate
The U.S. assisted living facility market size was valued at USD 91.8 billion in 2022, and is expected to expand at a compound annual growth rate (CAGR) of 5.53% from 2023 to 2030.
The south region is estimated to register the fastest CAGR of 6.20% from 2023 to 2030, but the west region has the largest number of facilities in the country, with a market share of 41.38%. Texas is producing the largest number of new or improved facilities for senior residents.
Aging.com predicts the U.S. will need two million housing facilities for adequate living space by 2040.
Assisted Living Costs Will Rise
The industry predicts a five-year growth rate of 4.4%, which could increase the median national assisted living cost to $6,480 in 2028.
Luxury Senior Living Facilities Will Gain Popularity, Despite the Cost
Assisted living facilities don’t have to be dreary. Luxury facilities are on the rise. On average, luxury senior living facilities are more expensive (30%) than regular communities. They offer various levels of support in addition to luxury features, including independent living, assisted living, memory care, and skilled nursing care—for a steep fee.
In addition to an entrance fee, residents will sign a long-term contract fee that can cost between $100,000 to $700,000 or more. Inquiring residents must show proof of assets to move into these facilities, which many require personal wealth assets.
The Need for Specialized Memory Care Options Will Grow
About 1 in 9 people (10.8%) age 65 and older have Alzheimer’s dementia, but only a small percentage of assisted living facilities are equipped to offer memory care. 13 million seniors are expected to have Alzheimer’s disease by 2050.
As a result, we predict a growing need for memory care-specific communities in the future.
Assisted Living Communities Will Integrate Technology to Improve Care
The Assisted Living Software Market—technology that helps manage the security, well-being, and satisfaction of facility residents—is expected to reach $682.51 million between 2023-2028, at a CAGR of 15.9%. This rapidly growing market is in response to the need for higher-quality care, according to a report by Introspective Market Research.
Facilities and individuals with this software will use it to communicate with families and healthcare professionals, schedule appointments, allocate resources, and standardize patient data.
Bottom Line
The assisted living sector in the U.S. is expanding rapidly as the population ages. By 2030, 73.1 million Americans will be over 65, increasing the need for senior housing. Currently, assisted living serves over 818,800 residents, but experts predict a sharp rise in demand, especially for memory care, as Alzheimer’s and dementia cases grow.
About 66% of families use retirement savings to cover these expenses, contributing to a yearly spend of $60 billion on self-funded care.
The rise in Alzheimer’s and dementia cases will significantly boost the demand for specialized memory care in ALFs. To keep up, care facilities need to adopt new technologies that improve care quality and expand their range of services.
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