Covering the cost of a retirement home

Just like organising your estate, choosing a suitable place to live after you retire is something that is best done as early as possible. This helps put your mind at ease, takes pressure off your loved ones, and ensures that you’ll be comfortable later in life. It’s always difficult to predict your future financial and logistical needs. However, that needn’t stop you from being aware, so myLIFE is here to offer guidance on this topic, from the different types of retirement home to their costs and available sources of financing.

Definitions

Care facilities for the elderly offer, according to the institutions themselves, around the clock support for a limited or indefinite period. Additionally, the support and care provided are adapted to individuals’ needs and level of independence. There are three types of facilities:

• • Accommodation facilities for elderly people, combining the old integrated centres for the elderly (Centres intégrés pour personnes âgées – CIPAs), and care homes. They offer accommodation with 24-hour support and deliver hotel, catering and maintenance services. They also offer entertainment and social activities, as well as help and care. At the end of December 2024, 54 accommodation facilities were listed on infosenior.lu.
  • Sheltered housing is accommodation that is specifically intended for independent or minimally dependent elderly people. They may be sold or rented, and offer services to the person with the aim of making their life easier (catering, activities, etc.). They also offer permanent on-site assistance and/or care at least 8 hours a day, 5 days a week. On the other hand, they do not provide for those needing more than 12 hours per week of support and care covered by long-term care insurance. Sheltered housing can serve as a stepping stone before moving into an accommodation facility for elderly people. 15 integrated homes were listed in Luxembourg on 31 December 2024.
  • Day centres are for people who continue to live at home and who want (or need) to maintain a social life while benefiting from support and continuity of care. Here, people can have meals and take part in therapeutic and leisure activities (board games, cooking, craft workshops, walks, cultural outings, etc.). They can also be cared for on a daily basis in order to relieve their families. Generally, these centres provide transportation between their establishment and the elderly person’s home. At the end of December 2024, there were 44 day centres in the country.

All of these facilities must fulfil certain obligations related to the quality of their services in order to get approval from the Ministry of Family Affairs, Solidarity, Living Together and Reception of Refugees. The list of homes for the elderly can be found at infosenior.lu.

It’s important to remember that, for the same price, your experience may vary widely depending on where you go. Make sure to visit the site in person and compare options before signing anything!

Financing

Finding the exact cost of a retirement home is not always straightforward. Generally, as the prices of each establishment are largely the same, the average monthly budget per person for accommodation, meals, and the daily support required to carry out basic day-to-day tasks can be estimated. These price variations are mostly due to different accommodation conditions, i.e. room sizes and available amenities. It’s important to remember that, for the same price, your experience may vary widely depending on where you go. Make sure to visit the site in person and compare options before signing anything!

What are the prices? In an internal memorandum published in December 2019, the Chamber of Employees (Chambre des salariés – CSL) stated: ‘In 2018, it will cost an average of €2,452 per month for a place in a single room in a CIPA, €2,706 in a care home and €1,718 per month in sheltered housing. These are average prices; and some institutions can charge more than €4,000, or even more than €5,000 per month for a single room.’ While we have not found any consolidated figures more recent than those published in 2019 by the CSL, it is clear that these prices have risen substantially since then. And with good reason, as inflation alone is close to 20% between the start of 2018 and the end of 2024. To see for yourself and find out the rates charged in establishments in Luxembourg, you can consult the Public Register of Services for Seniors.

How can I cover these costs? In addition to your state pension earned during your working years, you can use your savings or any other available capital (supplementary pension plan, retirement savings plan, etc.) to help cover the cost of a retirement home. This is why you should plan for your retirement as soon as you start your professional life.

Selling your house is also an option to consider if you need to cover the cost of a retirement home. This obviously requires that you be a homeowner, and your assets will take a substantial hit. This choice is never an easy one. However, it can be justified if you will not be using your home once you have moved into a retirement home. Selling it enables you to afford accommodation better suited to your needs that would otherwise be out of your price range.

You can apply to the Luxembourg National Solidarity Fund (Fonds National de Solidarité – FNS), who can, subject to conditions, take on part of the accommodation costs.

A little extra help

As not everyone can necessarily cover these monthly accommodation and catering costs, you can apply to the Luxembourg National Solidarity Fund (Fonds National de Solidarité – FNS) who can, subject to conditions, take on part of the accommodation costs.

A “geriatric care” allowance can be granted to people admitted for an indefinite period to an institution that provides day and night care and whose financial resources are insufficient to pay accommodation costs. NB: this aid can only be granted to approved establishments located in Luxembourg. Make sure to inform yourself about the Public Register beforehand.

This aid is calculated by taking the difference between the accommodation price (or, in some cases, the maximum amount allowed by law) and the applicant’s total income, minus an amount for personal expenses (EUR 538.33 for a cost-of-living index at 944.43).

In the case of a married couple or a couple in a partnership, if only one member of the couple is moving into a retirement home, the income of the whole household is taken into account. When calculating the allowance, however, an amount of €2,397.14 (cost-of-living index at 944.43) is deducted in favour of the person who continues to live at home. It may be increased by €1,152.07 per month per dependent child. In addition, if there is rent or mortgage repayment to be paid on the home occupied by the spouse (or partner), this is deducted from the couple’s total income (up to a maximum of €944.43 per month).

The “geriatric care” allowance is paid directly to the retirement home. Please note that homes in Luxembourg owned by the applicant will be mortgaged by the FNS.

Useful info: assistance will not be granted if the applicant’s personal property assets exceed €23,610.75 and €47,221.50 (cost-of-living index at 944.43) for a couple.

Dependent persons, i.e. those who need support with the essential acts of life (eating, dressing, washing, etc.), can, subject to conditions, benefit from social security cover for the costs of support and care. This assistance may take the form of benefits in kind or in cash. To qualify for care insurance benefits, the elderly person must need help for at least three and a half hours per week for more than six months. For more information, visit the National Health Fund (Caisse nationale de santé) website.

In Luxembourg, the share of the population aged over 65 could reach 25.5% in 2050, compared to 14.4% in 2019. In other words, there is likely to be a shortage of places available in retirement homes in the years to come. On top of these practical considerations, it’s important to assess and prepare for the financial side of things well in advance so that you can cover the specific costs related to this important stage in your life. Don’t leave it until the last minute!