Independence. Freedom. Peace of mind. Those are three things that nearly all Life Plan Communities (also often called Continuing Care Retirement Communities, or CCRCs) offer you.
But that’s usually where the similarities among senior living communities end.
The reason is because all Life Plan Communities offer widely different options in:
- Types of housing (apartments, duplexes, cottages, houses, etc.)
- Floor plan sizes (studios, one-bedrooms)
- Levels of living (independent living, assisted living, short- and long-term skilled nursing, memory care, rehabilitation)
- Services available at the community (housekeeping, maintenance, transportation,etc.)
- Amenities available at the community (such as dining choices, common spaces, activities, fitness spaces and classes)
- Opportunities for physical, emotional, intellectual and spiritual wellness
- Type of community (for-profit, not-for profit)
- Types of contracts (Type A, Life Care; Type B, modified plan; Type C, fee-for services, and Refundable and Non-Refundable)
As a result, the costs of senior living can also vary widely. How do you know which community fits the lifestyle you want today while also meeting your future needs? And just as important, how do you choose a senior living community and its associated retirement expenses that work with your finances and your nest egg?
This article will help you understand how entrance fees vary between different types of communities, see the price and value of senior living and give you a clearer picture on how each will fit your finances now and in the future.
First, ask yourself these 5 questions.
- What can I afford? The costs of senior living at a Life Plan Community, or CCRC, are twofold:
- You’ll pay a one-time entrance fee, which varies depending on the contract and floor plan you choose.
- You’ll also pay an ongoing monthly fee, which covers expenses you’d probably have whether you live at home or in a community, like meals, utilities, classes, social outings, maintenance and other expenses.
- What are my current and future needs? You’ll certainly want to consider what type of lifestyle you want today, and if you’re an active, healthy older adult you’ll definitely want to look into independent living at a retirement community.Of course, you can’t exactly predict what, if any, type of care you’ll need one day. But you can plan for it just in case. According to the U.S. Department of Health and Human Services, 70% of seniors 65+ will need some type of long-term care. A Genworth Cost of Care Survey showed the national 2020 market rates for care were:
- At-home living options (like in-home nursing and other health aides) — $4,576/month or $54,912 annually
- Assisted living — $4,300/month or $51,600 annually
- A private room in skilled nursing — $8,821/month or $105,852 annually
At a Life Plan Community, you’ll pay less than market rates for any higher level of care, or you could only pay for the care you need, helping you preserve your nest egg.
- Where do I want to live? There are Life Plan Communities all over the country. Do you want to be near family and friends? Or would you prefer to live near a popular vacation destination? The location of the retirement community you choose can have an impact on your cost of living.
- How can I learn more about a community? Visiting a community’s website is a good place to start, but also look for online reviews. Once you’ve got a list of possibilities, reach out to the communities to ask questions, request more information or schedule a personal visit.
- Who should I turn to for advice? Recruit a friend or family member to visit communities with you. Take notes, ask questions and chat with residents and staff at each community. One of the best things to do is to talk with friends who already live in retirement communities, even if you don’t have their community on your list. They can help you get a good idea of what life at a retirement community is really like. They can also help you see what other options are out there.
Understanding entrance fees
The contract and floor plan you choose at a senior living community determines the amount of your entrance fee. And that entrance fee, along with your monthly service fee, help pay for both the care you may one day need and the services, amenities and housing you enjoy today.
Type A contracts usually require the highest entrance fees of all these types of contracts. However, you’re assured priority access to future health care at lower-than-market-level rates.
Type B contracts require a lower entrance fee than a Type A contract, and for that you receive either a limited number of free days of health care, with additional days billed at per diem market rates, or an ongoing, minimally discounted rate.
Type C contracts require entrance fees that are much lower than the other two contract types. You may have access to care, but it will be charged at market rates, which are typically much higher than a Type A or B contract.
Deciding how senior living fits your finances
Knowing which contract to choose depends on your priorities. Do you prefer to pay a bit more, so you have a plan no matter what the future may bring? Then a Type A Life Care contract might be the best fit. A Life Care contract helps protect your assets by controlling the cost of higher levels of care, should you ever need them. Plus, with a Life Care contract you have an opportunity to take a tax deduction.
Or maybe you’re comfortable with paying less up front to accept more risk in the future. In that case, a Type B or Type C contract may be better. These entrance fees and monthly service fees tend to be lower because you are paying for fewer benefits, like advantageous health care rates.
Take your next step toward your future
Learn more about The Waterford in Juno Beach, Florida. Our Life Care community and our $205 million community expansion will make The Waterford an even more remarkable place for you to call home, today and tomorrow. To get started, contact us.
