How to Pay for Memory Care: 6 Options for Families

Many families cover the cost of memory care using money their loved one has saved. Examples of savings and other private assets typically used to pay for memory care include:

• Retirement plans like 401(k)s, IRAs, and employer pensions
• Savings accounts
• Stocks and bonds
• Personal property

“Families most often combine payment sources like the senior’s income, savings, sale of a home, and any stocks or retirement portfolios,” says Beth Wilkison, a learning and development manager at A Place for Mom, who has two decades of experience working with families in memory care and other senior living communities.

A home is often a person’s largest asset or investment and can be used as a source of funds to pay for a memory care community. Here are a few ways you can leverage your loved one’s home equity to pay for memory care:

• Proceeds from selling a home can directly cover memory care costs.
• Renting a home to others can cover the mortgage and free up other funds to pay for memory care. If the mortgage is paid in full, regular rental income can help pay for memory care.
• Reverse mortgages allow homeowners aged 62 and older to convert equity in their home into tax-free income by either receiving a lump-sum amount, a line of credit, or a monthly payment. The loan becomes due after the borrower dies, sells their home, or no longer lives there, unless another borrower or their spouse continues to live there.^[01]
• Bridge loans are short-term loans that can help homeowners gain cash flow quickly if a move to memory care is urgent. A bridge loan can be used help pay for needed care until the home sells or other payment sources become available. Bridge loans come with risks: interest rates and transaction costs may be higher than a reverse mortgage or a home equity line of credit (HELOC). Also, their repayment periods are much shorter, so if you’re selling your loved one’s home, there may be a risk it won’t sell before the loan payments are due.^[02]

Can you afford memory care?

Long-term care insurance policies are used to pay for long-term care needs, which can include a memory care community. Policies differ on what they cover, so reach out to your loved one’s insurer to ask whether memory care is covered.

It’s important to understand that your loved one must have purchased a long-term care insurance policy before needing long-term care. Mid-50s, when one is in relatively good health, is generally the best age to buy a policy.^[03]

Life insurance plans may also be used to cover memory care costs in a few ways. For example, a policyholder can sell their policy to a third party and use the proceeds to fund memory care. Or a life insurance policy may be surrendered to the insurance company for its cash value.

However, using life insurance to fund memory care can involve relinquishing policy ownership, which means beneficiaries won’t receive benefits upon the insured’s death.

Social Security retirement benefits and Social Security Disability Insurance (SSDI) are two programs administered by the U.S. federal government. The monthly benefit amount for each program depends on how much a person pays into the Social Security fund during their career. Social Security benefits are an important source of income for people living in memory care communities.

Social Security retirement benefits are provided to people and their spouses who are at least 62 years of age and who have worked and paid into the Social Security system long enough to qualify. The average monthly Social Security retirement benefit in 2025 is about $1,979, or less than one-half the median cost of memory care in 2025.^[04,05]

Social Security Disability Insurance (SSDI) is for people who are no longer able to work because of a disability that’s expected to last longer than one year or result in death. The disability must also prevent them from doing work they’ve done in the past and from adjusting to other types of work. In 2025, the average monthly SSDI benefit is about $1,581.^[04] Once someone who is receiving SSDI benefits reaches full retirement age, their monthly payment is converted to the Social Security retirement benefit.^[06]

Expert advice for affordable memory care

Two important sources of public funds that can be used to pay for memory care include the Medicaid and Supplemental Security Income (SSI) programs. Both programs rely on federal and state funding. Often, people who qualify for SSI also qualify for Medicaid.

Medicaid is a public health insurance program for people who have limited income and financial resources. Medicaid may cover memory care services in a memory care community, but the type and extent of coverage varies greatly between state Medicaid programs. (Medicaid is often confused with Medicare, which doesn’t cover the cost of memory care.)

Medicaid won’t pay for room and board in memory care facilities. However, most states provide home and community-based services (HCBS) programs, which can be used to cover the cost of some memory care services. HCBS programs are designed to help individuals stay in community settings, rather than moving into an institutional setting or a nursing home.^[07]

To qualify for these services, a person who’s diagnosed with Alzheimer’s or another type of dementia must meet state requirements, which often include:^[08]

• Having income or assets below a certain level
• Being a certain age
• Requiring an institutional level of care

SSI benefits are for people with low incomes who are disabled or who are 65 years of age or older. There is no work history requirement to receive SSI benefits. Monthly benefit amounts depend on a person’s income, assets, living situation, and other factors. In 2025, the average monthly SSI payment is $590 for someone aged 65 or older.^[04] Some states also provide financial support in addition to federal SSI payments.^[09]

The Department of Veterans Affairs (VA) offers several benefit programs that can help senior veterans who qualify cover the cost of memory care. VA programs that can help pay for memory care in a facility, include the following:

• Veterans Pension and Survivors Pension. Veterans and their surviving spouses may qualify for monthly payments from a VA pension if they meet certain wartime service, financial, and age or disability requirements.^[10,11] Recipients may use these funds however they’d like, including for a private-pay memory care community.
• Aid and Attendance. If a veteran qualifies for the Veterans Pension, they may also qualify for the Aid and Attendance (A&A) benefit. This benefit provides additional financial assistance to veterans who meet one of many specific requirements, one of which includes needing assistance with activities of daily living (ADLs).^[12] It’s added to one’s existing VA pension to cover any costs that improve the recipient’s quality of life — including memory care. A surviving spouse who qualifies for the Survivors Pension may also receive the A&A benefit if they meet the additional criteria.

A single veteran who qualifies for the Veterans Pension and Aid and Attendance can receive up to $2,358 per month.^[13] A surviving spouse who qualifies for the Survivors Pension and Aid and Attendance can receive up to $1,515 per month.^[14] Exact pension amounts depend on a veteran’s or surviving spouse’s income, the number of dependents they have, and other factors.

In addition to the payment sources described above, families also frequently contribute to the cost of an aging parent’s stay in a memory care community.

“We’re seeing lots of families paying out-of-pocket these days,” says Wilkison. “Once the other payment sources have been exhausted, [their adult children] are taking what’s left and dividing it so that each contributes to the total cost.”

As your loved one’s condition progresses, the cost of required care services typically increases, exhausting a family’s resources. Before it gets to that point, it can be helpful to talk with a financial professional who knows your loved one’s finances and can help you identify current and future options. Senior living experts who have helped families navigate payment options for care are also a good resource.

A Place for Mom’s Senior Living Advisors are experienced with the many private and publicly funded payment options and can help your family work within your budget to pay for memory care. They can also answer any questions you have about memory care and other types of senior living at no cost to your family.