As discussed in last week’s blog post, the “Peak 65” segment of the Baby Boom generation — the last cohort to reach retirement age — faces a mixed financial picture. While Baby Boomers as a group control a large share of the nation’s wealth, estimated at roughly $80 trillion in assets, a 2024 AARP Financial Security Trends Survey shows that one in five Americans age 50 and older have no retirement savings.
This sharp divide raises important questions about the future of senior living and whether many Peak 65 retirees will be able to afford the care and housing options available today. Will retirement communities, assisted living, and nursing home care remain accessible to the growing number of retirees over the next decade? And what can be done at the societal and industry level to address the gap?
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Polarity of Baby Boomers’ retirement savings
To appreciate the scope of the problem, it helps to examine how wealth is distributed among older Americans. The Federal Reserve’s 2022 Survey of Consumer Finances shows that wealth among those 65 and older is highly concentrated. The top 1% in this age group hold roughly 30% of the wealth owned by people over 65. Given the U.S. population of roughly 58 million people aged 65+ in 2022, that top 1% represents about 580,000 individuals. By contrast, the bottom 50% of older Americans hold just about 4% of the age group’s total wealth.
These disparities indicate that a well-off slice of Baby Boomers will be positioned for a comfortable retirement, while a large portion faces financial insecurity. The 2024 AARP survey also found that nearly half (45%) of Baby Boomers believe their retirement savings will be insufficient to maintain their desired lifestyle in retirement, and about 20% of people over 50 report having no retirement savings at all.
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The impact on retirement community access
The financial divide will shape access to senior living. Affluent Baby Boomers can continue to afford premium retirement communities with higher entry fees and luxury amenities. For many others, rising costs for assisted living, nursing care, and even independent-living communities may block access to appropriate housing and services.
According to the Genworth Cost of Care Survey, the 2025 national median monthly cost for assisted living is about $6,077, while nursing home care can average $9,555 per month for a semi-private room and $10,965 for a private room. These figures are averages; costs in some regions are substantially higher. With many retirees’ finances strained or nonexistent, long-term care prices will be unaffordable for a large share of the population.
It is important to remember that Medicare does not generally cover assisted living or non-medical long-term care. Most of these costs must be paid out of pocket or covered by long-term care insurance. Medicaid can cover nursing home care for those who exhaust their financial resources and qualify, but coverage is limited to Medicaid-certified facilities, not private-pay options, and program capacity is constrained.
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Will Peak 65 Baby Boomers be able to afford senior living?
With current wealth disparities, it’s unclear whether most new retirees over the next 10 to 20 years will be able to afford today’s senior living options. Many will likely find it difficult. Social Security alone typically won’t cover the cost of senior housing and care for those without adequate savings. For example, the average monthly Social Security retirement benefit in January 2025 was about $1,976 — less than $24,000 a year — while the maximum benefit for someone at full retirement age is around $4,000 per month.
Some subsidized senior housing and rental assistance programs exist through HUD, and Medicaid-certified facilities provide long-term care to qualifying low-income individuals. However, these programs have limited capacity and long waiting lists. As the Peak 65 cohort ages, demand for affordable senior housing and quality, reasonably priced care will grow faster than the system can currently supply.
>> Related: Outside-the-Box Solutions for Middle-Market Senior Living
Creating more affordable senior living and care options
The financial challenges facing many Baby Boomers emphasize the need for more affordable senior living choices. Policymakers and industry leaders must acknowledge that not all older adults can move to retirement communities or private-pay long-term care facilities, and many lack the savings to afford luxury options.
There is an urgent need to expand affordable housing and care models to serve the growing population of older adults, especially the estimated 45% who feel their savings are insufficient for retirement. Solutions should include both government-supported programs and private-sector innovation.
Societal solutions
Expanding programs such as HUD’s Section 202 Housing for the Elderly could help by incentivizing development of affordable rental housing for low-income seniors and connecting residents with supportive services that enable independent living. Other approaches include encouraging cooperative senior housing (senior living co-ops), intergenerational communities, homesharing programs, naturally occurring retirement communities (NORCs), and rent-controlled units. These models can help close the affordability gap for many Peak 65 Baby Boomers.
New senior living industry options
The senior living industry must also rethink pricing and explore cost-effective alternatives. This can include more moderately priced independent living communities and expanded home-based long-term care options. One promising model is continuing care at home (CCAH), offered by some life plan communities, which allows older adults to remain in their homes while receiving coordinated care as needed — often at a lower cost than moving into a facility.
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A challenge society and the senior living industry must solve
The financial split within the Peak 65 Baby Boomer cohort will have lasting effects on senior living. While some retirees will enjoy financial security, many will struggle to afford housing and healthcare. To remain viable and serve the growing population, the senior living industry must develop affordable housing options and rethink how long-term care is delivered.
Adapting to these realities is essential not only for the industry’s future, but also to ensure that older adults of all income levels can age with dignity and access the care they need. As the Baby Boomer generation continues to grow older, creating inclusive, sustainable, and affordable senior living and care solutions is an urgent national priority. Policymakers, communities, and industry leaders must act now to prevent the financial divide from leaving too many older adults without the stability and care they deserve.