1. Retirement Savings and Personal Assets
Personal savings are usually the first source families use to pay for memory care. For many households, though, savings alone will not cover years of care.
Common personal assets include:
- 401(k) plans, IRAs, and employer pensions
- Checking and savings accounts
- Stocks, bonds, and other investments
- Annuities and certificates of deposit (CDs)
Before withdrawing from retirement accounts, talk with a tax professional. Large withdrawals can raise your loved one’s taxable income for the year. A clear plan helps savings last longer and keeps future options, such as Medicaid, open.
2. Home Equity
A paid-off or mostly paid-off home is often a family’s largest asset. There are four common ways to use home equity to pay for memory care.
Selling the home. The sale proceeds can pay for memory care directly. This is often the simplest choice when no spouse or family member still lives in the home.
Renting the home. Rental income can cover the mortgage or, if the home is paid off, help pay the monthly memory care bill. Keep in mind that being a landlord takes time and carries repair costs.
Reverse mortgage. Homeowners aged 62 and older can turn part of their home equity into tax-free funds as a lump sum, a line of credit, or monthly payments. The loan usually comes due when the borrower dies, sells, or permanently moves out. Because a move to memory care can trigger repayment, review the terms carefully if a spouse will not stay in the home.
Bridge loan. A bridge loan is a short-term loan that covers care costs while the home is listed for sale. It can help when a move to memory care is urgent. Interest rates and fees are usually higher, and repayment periods are short, so there is risk if the home sells slowly.
3. Long-Term Care Insurance and Life Insurance
Long-term care insurance is designed to pay for extended care, and many policies cover memory care. Coverage varies widely, so call the insurer and ask three questions: Is memory care covered? What is the daily or monthly benefit? How long is the elimination (waiting) period? A policy must be bought before care is needed, which is why most people purchase one in their 50s or early 60s.
Life insurance can also help pay for memory care in several ways:
- Accelerated death benefit: some policies pay part of the death benefit early for a chronic or terminal illness.
- Cash surrender: a whole life policy can be surrendered for its cash value.
- Life settlement: the policy can be sold to a third party for more than its cash value but less than its death benefit.
Using life insurance this way reduces or ends what beneficiaries receive later. Weigh that trade-off with your family and a financial advisor.
4. Social Security Benefits
Social Security provides steady monthly income that can go toward memory care, but on its own it covers only part of the bill.
Social Security retirement benefits are paid to workers who earned enough credits and are at least 62, and in some cases to their spouses. After the 2.8% cost-of-living increase, the average retirement benefit in 2026 is about $2,071 a month, roughly a third of a typical memory care bill.
Social Security Disability Insurance (SSDI) supports people who cannot work because of a disability expected to last at least a year or end in death. Younger adults diagnosed with early-onset Alzheimer’s may qualify. The average SSDI benefit in 2026 is about $1,586 a month. SSDI automatically converts to a retirement benefit at full retirement age.
Because these benefits rarely cover the full cost, families usually pair them with savings, home equity, or other programs below.
5. Medicaid, Medicare, and Supplemental Security Income (SSI)
Medicaid for memory care
Medicaid is a joint federal and state health program for people with limited income and assets. Medicaid does not pay for room and board in a memory care community, but most states help cover the care and support services residents receive.
States provide this help in one of two ways:
- Regular state Medicaid (Aged, Blind, and Disabled Medicaid). This is an entitlement, so everyone who qualifies receives services.
- Home and Community-Based Services (HCBS) waivers. These programs have limited enrollment, so there may be a waitlist.
Eligibility usually depends on income and asset limits, age or disability, and a need for a nursing home level of care.
Arizona families: ALTCS
In Arizona, long-term care Medicaid is called the Arizona Long Term Care System (ALTCS), run through AHCCCS. ALTCS can help pay for care services in assisted living and memory care settings for people who meet its medical and financial rules. The application includes a functional assessment and a detailed financial review, so it helps to start early and gather records in advance.
Medicaid vs. Medicare: what’s the difference?
The two programs are often confused. Medicare is federal health insurance for people 65 and older and some younger people with disabilities. Medicare does not pay for room and board or ongoing custodial care in memory care. It may still cover doctor visits, hospital stays, short-term skilled nursing, hospice, medical equipment, and prescription drugs through Part D.
Supplemental Security Income (SSI)
SSI provides monthly income to people with very limited income and assets who are 65 or older, blind, or disabled. No work history is required. In 2026, the maximum federal SSI payment is $994 a month for an individual, and some states add a supplement. People who qualify for SSI often qualify for Medicaid as well.
6. Veterans Benefits for Memory Care
The U.S. Department of Veterans Affairs (VA) offers benefits that can help eligible veterans and surviving spouses pay for memory care. Many families never apply simply because they don’t know these benefits exist.
Veterans Pension and Survivors Pension. These monthly payments go to wartime veterans and their surviving spouses who meet age or disability rules and income and net worth limits. The net worth limit through November 30, 2026, is $163,699. The money can be used for any purpose, including private-pay memory care.
Aid and Attendance. This is an added amount on top of the VA pension for people who need help with activities of daily living, such as bathing, dressing, or eating. Many people living with dementia qualify.
| Aid and Attendance recipient | Maximum monthly benefit (Dec 1, 2025 – Nov 30, 2026) |
|---|---|
| Single veteran | $2,424 |
| Veteran with a spouse or dependent | $2,874 |
| Surviving spouse | $1,558 |
The actual payment is the maximum rate minus the person’s countable income. Unreimbursed medical costs, including memory care fees, can lower countable income and raise the benefit. VA rates are updated each December 1.
Family Contributions and Getting Expert Guidance
When other sources run low, adult children often share the cost of a parent’s memory care. Some families split the monthly gap evenly; others divide it based on what each person can afford. Putting the agreement in writing helps prevent conflict later.
Care needs usually increase as dementia progresses, and costs rise with them. Planning early gives your family more choices and less stress. Helpful steps include:
- List every income source and asset your loved one has.
- Estimate monthly memory care costs in your preferred area.
- Check eligibility for Medicaid (ALTCS in Arizona), SSI, and VA benefits.
- Speak with an elder law attorney or financial advisor about protecting assets.
- Talk with a senior care navigator who can compare communities within your budget.
The advisors at Senior Patient Navigator help families understand each payment option, find memory care communities that fit their budget, and plan for what comes next. Our guidance is free, private, and no-pressure. For more on dementia stages and care options, visit our Dementia Guide.
Frequently Asked Questions About Paying for Memory Care
Does Medicare pay for memory care?
No. Medicare does not pay for room and board or long-term custodial care in a memory care community. It may cover medical services such as doctor visits, short-term skilled nursing, hospice, and prescriptions.
Does Medicaid pay for memory care in Arizona?
Arizona’s long-term care Medicaid program, ALTCS, can help pay for care services in memory care settings for people who meet its medical and financial requirements. It does not cover room and board.
Can VA benefits be used for memory care?
Yes. Eligible wartime veterans and surviving spouses may receive a VA pension with Aid and Attendance and use it toward memory care costs.
What can families do if savings run out?
Families can apply for Medicaid, look into VA benefits, use home equity, or share costs among relatives. Planning ahead with a senior care advisor makes this transition smoother.
Does Senior Patient Navigator charge families for help?
No. Senior Patient Navigator offers no-cost guidance to help families understand memory care costs, payment options, and communities.
Talk to a Senior Patient Navigator Advisor
You don’t have to figure out memory care costs alone. A Senior Patient Navigator advisor can review your loved one’s situation, explain which payment options fit, and help you find memory care communities in Phoenix and across Arizona that match your budget.
Check eligibility or contact our team for free, no-pressure guidance. Call us at +1 (602) 377-8102.
This article is for general information only and is not legal, financial, or medical advice. Benefit amounts and program rules change; confirm current details with the agency or a qualified professional.