Cost of assisted living vs. in-home care: key considerations

We know how important it is to have the right support while still maintaining your independence and daily rhythms. The good news? There are care options that not only help you manage the day-to-day but also empower you to live life on your terms. 

Both assisted living and in-home care offer personalized support to help you feel safe, cared for, and still very much in charge. While each option has its own perks, the cost of assisted living vs. in-home care is often a key factor when deciding what fits best. 

Your expenses will vary based on your lifestyle, support system, health needs, and even where you live. But with a clear picture of what each option offers—both financially and practically—you’ll be better equipped to choose the path that works for you. 

Assisted living and in-home care are two types of aging care that support adults with activities of daily living (ADLs). ADLs are personal care tasks such as eating, bathing, and dressing. These tasks can become more challenging due to aging, injury, or a chronic condition. 

There are also the instrumental activities of daily living (IADLs), which are daily household tasks that include grocery shopping, cooking, cleaning, and doing laundry. 

You’ve likely heard the term “assisted living community.” This is what we’re referring to when we talk about assisted living. These aging care residences combine daily support and hands-on care with housing and a communal lifestyle. Typically, residents receive room and board, meals, housekeeping, and ADL assistance while enjoying social and recreational activities with other people in the community.

In most cases, costs for assisted living are paid monthly. According to our Cost of Care survey, the 2024 national average for assisted living communities was $5,900 a month. 

In-home care allows you to keep living at home while receiving everyday support from professional caregivers.  

According to our Cost of Care survey, the average national hourly rate for a home health aide in 2024 was $34. 

There are two types of in-home care to know about: 

• Non-medical home care – Also called personal care, non-medical home care provides support for ADLs and IADLs.  

• Home health care – A step above personal care, medical home care or home health care is provided by a trained clinician, such as a nurse or therapist. If you need help with wound care, physical therapy, or medication injection, then this may be the ideal home care route for you. 

Let’s say you’re considering an assisted living community. As mentioned, you’d likely have to pay monthly. But what exactly are you paying for? 

In addition to room and board, meals, and housekeeping, assisted living communities usually offer a lot of optional amenities, plus services that help enhance independence and foster a stronger sense of community. 

Typically, monthly fees at assisted living communities account for baseline services: a room, meals, WiFi, 24/7 staff, and on-site activities.  

However, many other factors can factor into your monthly payments. To start, the more care you need, the more expensive assisted living usually is. Some communities even use pricing tiers that vary based on the level of care.  

Here are some possible care factors that can influence the cost of assisted living for you:  

• Medication management and administration 

• Physical mobility 

• Level of ADL help 

• Special diet 

• Bathroom assistance  

The right care tier for you is often determined by an assessment of staff caregivers.

Aside from the level of care you need, there are some additional criteria to consider that can increase your monthly costs.

• Location – Costs for assisted living communities vary by state, given differences in the overall cost of living. Urban areas also usually come at a higher price point, while rural areas are usually less costly. 

• Size – Assisted living communities usually offer different options for apartment sizes. You’ll likely see different price points for studio and one-bedroom apartments.  

• On-site amenities – Some communities offer recreational amenities such as pools, tennis courts, and movie theaters. While these amenities come with a higher price tag, they also add entertainment and recreational variety to your living space.

Essentially, with assisted living, you can curate your experience based on your preferences, wants, and needs. If you’re not interested in a large apartment or a modern fitness center, you can choose a one-bedroom apartment in a rural area that offers walkable trails or scenic grounds for lounging. However, if you prefer a bit more luxury and a variety of amenities, you can pay extra to check all the boxes on your list. 

Here’s something important to note about assisted living: The monthly baseline fee may not include all of the expenses you’re actually responsible for.  

Other fees to be aware of include:

• Community fees – This is an initial one-time fee that new arrivals pay when moving into an assisted living community. 

• Rent increases – As the housing market fluctuates, so can your annual rate. In fact, some assisted living communities automatically increase their rates every year.  

• Increased care costs – Even if you start at a low tier, you may require more care throughout your aging journey. Be aware of all the ways in which your monthly costs could increase over time.  

• Memory care – Some assisted living communities provide on-site memory care units designed for added safety and support for adults with Alzheimer’s or other forms of dementia. The costs of memory care typically increase monthly fees.

The best way to stay on top of all actual and potential costs is to carefully review your contract or even have a lawyer take a look at it before moving into an assisted living community. 

A new space, meals and housekeeping taken care of for you, and daily activities with other adults in your community—there are plenty of things to love about assisted living. Of course, it can be bittersweet to move out of your current home. If you’d rather stay where you are, there’s in-home care options to maximize the benefits of aging in place.

Unlike the assisted living payment structure, in-home care is typically paid for by the hour. These hourly rates can fluctuate based on a variety of factors, such as where you live, your level of care, and any medical specializations. Generally speaking, the more help you need, the more hours of in-home care, and the higher the monthly cost of aging in place.

Let’s go through some of the ways in-home care expenses can fluctuate.

The type of care you need will determine the right caregiver for you. As we’ve mentioned, in-home care can be either medical or non-medical, and certain people are trained and qualified for each.  

• Non-medical in-home care includes hands-on home care, such as assistance with ADLs and hands-off IADL tasks such as shopping, cleaning, and laundry. Their hourly rates are lower than clinical caregivers. In some areas you may have to pay overtime rates for caregivers that work over 40 hours per week or shifts longer than 8 hours. 

• Medical in-home care can include licensed nurses, physical therapists, occupational therapists, and more provide medical in-home health care. As trained clinicians, these caregivers typically have higher salaries than non-medical in-home care. Home health care is typically for short-term support and is usually covered by Medicare immediately after a hospital stay. However, this option can become less cost-effective in the long term, depending on how many hours a week you need support. These clinicians will not help with tasks typically done by a home health aide such as bathing and toileting so you will likely need to hire both types of care. 

Keep in mind that hourly in-home rates only include a caregiver’s services. Other potential expenses that can come along with in-home care include:

• Home modifications: Ramps, handrails, bathroom grab bars, etc.  

• Transportation: Some home health aides may charge for mileage if they provide transportation. You may also need to pay for ride shares or local transportation

• Necessities: Food and other everyday basics  

• Utility bills: Electricity, water, WiFi 

• Medical supplies: Medications and equipment 

You can utilize different financial strategies, such as tapping into your home's equity with a reverse mortgage, to cover these additional expenses and prepare your home for aging in place. If you are staying in your home don’t forget to factor in costs for any ongoing maintenance that your home will require, such as painting, yardwork or minor or major repairs.  On the other hand, many of these costs would be included in an assisted living community’s monthly rate.  

Budgeting is important. But ensuring you receive the right type of care is even more important. When making your decision, don’t overlook things like your comfort and overall well-being. 

To ensure a smooth transition and your long-term happiness, take the time to consider these other important factors:

• Level of care: The ADLs or IADLs you need help with should play a big role in determining the type of care you need, as well as the financial commitment required to ensure your safety, comfort, and happiness. For instance, the more tasks you need support with, the more hours a week you’ll pay for an in-home caregiver. More than 44 hours a week, and you may want to do a cost analysis of moving into an assisted living community.

• Care coordination: While in-home care can provide your care in the comfort of your home it can also require a lot of coordination with caregiver shifts and appointments. Assisted living can let you take a step back as care and activities are managed for you. 

• Your care circle: In-home care costs can add up the more care that’s provided. So, if you choose this option, you’ll also want to have people close by to call on just in case. A care circle can include family, friends, or neighbors. If you don’t have anyone living nearby, assisted living can bring you more peace of mind and an unmatched support system. 

• Socialization and lifestyle – Assisted living communities offer plenty of opportunities for socialization, tons of activities, and fun ways to meet new people. If you live on your own or far from your care circle and are worried about feeling isolated during the aging journey, assisted living can provide you with support and an engaging social life.

Assess your needs, wants, preferences, and finances, and you’ll discover the most fulfilling aging care option for you.  

Everyone’s needs are different, and the choice between assisted living and in-home care should be based on what aligns best with your lifestyle and goals. If you value independence but need occasional support, in-home care may be a better fit. However, if you require more consistent, hands-on care and social opportunities, assisted living could offer the community and services that help you thrive. Whatever you decide, prioritize your well-being and comfort in the decision-making process.