Living in a retirement community is expensive, whether it is the type where you own your home or the type where you pay an entrance fee and have the guarantee of moving beyond independent living if you need additional levels of care. When we started to investigate the options, we weren’t sure we could afford it, and at the time we weren’t sure we needed the extra health care.
Retirement communities come in a variety of shapes and sizes. Some require a large (hopefully partial) refundable entrance fee (varying from several hundred thousand to a million dollars); others have month to month contracts. The cost varies tremendously by the facility and the geographic location. A community in California or Massachusetts is going to be more expensive than one in Georgia or Colorado. Once you have entered one of these communities, it is not always easy to leave or get your refund back. Some entrance fee refunds are as high as 95% of your original fee; others only 75%. Since most entrance fees do not increase with inflation, if you live in the community a long time, your initial fee will be worth much less over time if you decide to leave or if you die.
While it is true that you save money on all kinds of things like home repairs, food, utilities, newspaper subscriptions, gardeners or housekeepers, and life is just easier all around without these worries, the monthly fees you pay are almost always higher than what it would cost to stay in your own home. So it is important to investigate these options well in advance of any move, because the more time you have to make this choice, the happier you will be with the result. Do you want to live closer to your children or grandchildren? This is a common reason for joining a community in another area. Do you want to stay in your own community where you have friends and know how to get around? Or do you anticipate a health condition that might mean you need more assistance in the future?
I know a woman who is in her late 60s and perfectly healthy, but she is starting her search now, so that when the time comes, she will have some choices. Most of us are not nearly that organized or plan-ful! Whatever decision you make, you will want to visit the facility several times, ask questions of people who live there, investigate all the financial requirements, consult your family, and hopefully have the time to make that plan-ful decision.
If you wait too long to make the decision and your health declines, you may not have the choices you want. It’s a tricky balance. If you want to qualify for a “continuing care retirement community” (CCRC ), usually these communities require that you be able to enter as an “independent living” resident before you need more intensive levels of care. Does that mean you can’t be in a wheelchair when you enter? Sometimes it does. What if you have already received a diagnosis that might make it difficult to manage on your own? Will they still take you? The rules vary from place to place.
If you wait until you cannot live independently, your options may narrow to “Assisted Living“. Assisted living usually offers three meals a day, fairly small apartments, help with activities of daily living, and on site nursing care. Many of these places have a variety of activities, but the level of disability is higher than a regular retirement community (where you own your own home but there is no health care included) or a CCRC (where you “rent” and there are a la carte health services available on site). Assisted living is expensive on a monthly basis (e.g. in California it can cost between $5000 and $10,000 a month, depending on the location in the State), but you are not locked into an entrance fee. There may be financial assistance for assisted living if you are low income and qualify for Medicaid, but these facilities often have long wait lists.
Why go to a retirement community when you could stay where you are with a little help? We certainly weighed the pros and cons, but in the end, the apartment we really liked became available sooner than we expected, and rather than lose it, we gulped and put down the entrance fee. Now that we have been here for almost a year, we are pretty happy we made the move. We both had health issues that surfaced faster than we thought they would, the activities and services available to us have kept us engaged and busy, and we are now only 20 minutes away from our daughter and grandson, so they come to see us much more often!