The cost of senior living varies based on several factors, like available services and amenities, floor plan, contract type, and location (consider the cost of living in the Bay Area versus a Midwestern suburb or even a rural area).
Entrance fee
In many types of CCRCs, residents pay an entrance fee, sometimes known as buy-in.
The Entrance Fee is a cost that, particularly with Inclusive CCRCs, includes unlimited resident access to continuum of care services (i.e., residents will have access to higher levels of care beyond independent living) with little to no increase in residents’ monthly fees.
At Vi communities, a resident’s entrance fee is based on the floor plan, care option and return option.
What's a return option?
Return options offer a refund for a portion of the entrance fee to a resident or their estate, should they leave the community for any reason. Returns range from 0% to 90%.
In general, choosing a lower return option means paying a lower entrance fee, while choosing a higher return option means paying a higher entrance fee.
Monthly fee
Residents pay a monthly fee in addition to their entrance fee. The fee amount varies from community to community (more on that later) and depends on a variety of factors, including the CCRC’s contract type.
In general, monthly fees cover services and amenities that include:
- Long-term care
- Dining
- Lifestyle and fitness activities
- Utilities, building and facilities maintenance, etc.
In Vi communities, the monthly fee also includes concierge services, security, laundry and housekeeping services, arranged transportation, and parking and valet services. Ancillary items not included in the monthly fee vary by community and could include additional meals, salon appointments or golf cart rentals.
The monthly fee at an Inclusive Care CCRC doesn’t change as you move between independent living and assisted living, skilled nursing, or memory care.
The average entrance fee among all types of CCRCs is $300,000, and the National Investment Center for Seniors Housing and Care 2019 Investment Guide found average monthly fees (among all types of CCRCs) to be $3,353. But as you will see, entrance and monthly fees vary widely among contract types.
Variations in cost predominantly come down to care: how much residents pay for up front and, if they haven’t paid up front, how much they’ll need to account for it in the future. However, services and amenities will also impact cost. You’ll also find a wide range of CCRCs—from budget-friendly with basic amenities and services to communities which feature luxurious, resort-like properties, 5-star amenities and exceptional levels of service.
Inclusive (Type A) Continuing Care Retirement Communities offer access to higher levels of care with little to no increase in monthly fees.
Because they’re investing in advance to access future care, residents pay the most up front to live in an Inclusive CCRC compared to other contract types.
Entrance fees can range from $150,000 to more than $1 million. Monthly fees will range depending on the services and amenities offered, though average monthly rates run from $2,500 to $5,000.
CCRCs with Modified (Type B) contracts, which include a limited amount of care (or number of care days) before charging market rates for services, are in the mid-range of average costs.
“Market rates,” by the way, refer to the cost of care at any given time. The price of care can fluctuate for many reasons, from caregiver wages to the cost of commodities like medical supplies and medications.
Entry fees for modified contracts will run between $80,000 to $750,000, and monthly rates will be between $1,500 to $2,500.
Residents of Fee-For-Service (Type C) CCRCs will pay the least up front — usually $100,000 to $500,000 for the entrance fee.
Fee-For-Service monthly fees have the widest range: Residents pay market rates for higher levels of care, should they need them, so costs are not as predictable as in other CCRC contract types.
For example, a resident in independent living will not pay as much as one who requires skilled nursing or memory care services.
Genworth, which has been tracking the cost of senior care since 2004, offers some context for how typical CCRC costs stack up against standalone care facilities.
- Standalone assisted living: $4,300 per month (as of 2020)
- Standalone skilled nursing: $8,820 per month (as of 2020)
Average assisted living costs, as well as skilled nursing costs, are continually on the rise, outpacing the rate of inflation, according to Genworth.
And remember that care costs are also dependent on your geographic location — the amount you pay near a big coastal city versus a Midwestern suburb will vary greatly.
Many seniors think they can save money by aging in place at home — and that may be true at first. Because of the entrance fee associated with most types of CCRCs, the up-front costs can appear high compared to aging in place at home.
But depending on your lifestyle, the costs of living at home can add up quickly:
- Property taxes, HOAs and special assessments
- Utilities, cable and internet
- Security
- Groceries
- Landscaping and cleaning services
- Gym and country club memberships
- General home upkeep
- Future care
You may have to make additional investments down the road if you require home-accessibility modifications or professional caregiving: According to the American Seniors Housing Association, it could cost tens of thousands of dollars to modify your existing home for your changing accessibility needs.
And Genworth’s Cost of Care Survey has outlined the average costs of in-home health care costs as of 2020:
- Full-time weekday care (40 hours per week): $4,000 per month
- Around-the-clock care (24 hours per day, 7 days per week): $17,000 per month
When you do the math, staying at home may not be the economical alternative it appears to be.
So, is a CCRC worth the cost?
Money is a personal matter, and whether something is a good investment depends on your level of financial comfort as well as what you value in life. As such, rather than simply comparing a sea of numbers, consider the lifetime costs associated with the communities you’re considering.
If you value having a plan in place for future care, the higher entrance and monthly fee of an Inclusive CCRC may be worth it to you. Choosing a CCRC with an 80% return option might be a good investment if it aligns with your wealth management goals or your estate plan. Perhaps you don’t mind the prospect of paying market rates for future care, should you need it, if the tradeoff is a lower entrance and monthly fee in a Fee-For-Service or rental community.
It’s all about your personal perspective.
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There’s a lot to consider when embarking on the next phase of retirement—and contacting us is a big step. (Well done!)
We’ll be in touch soon to share expert insights and resident perspectives that we hope are helpful, and one of our team members will also be reaching out to answer any questions you may have.
As with all discussions of cost, “expensive” is a relative term.
Typically, Inclusive CCRCs are a bigger investment up front than rental properties and other types of CCRCs that do not include unlimited access to higher levels of care if needed.
However, the true lifetime cost of an Inclusive CCRC may actually be comparable to those counterparts, depending on future care needs and market rates for those services.
You’ll find a wide range of CCRCs—from budget-friendly with basic amenities and services to communities which feature luxurious, resort-like properties, 5-Star amenities and exceptional levels of service. You’ll also discover that care offerings and quality of care available can vary by community.
Ask the communities you’re considering to provide a breakdown of what it costs to live there so you can compare your investment apples to apples.
In many types of CCRCs, residents pay an entrance fee, sometimes known as buy-in.
The Entrance Fee is a cost that, particularly with Inclusive CCRCs, includes unlimited resident access to continuum of care services (i.e., residents will have access to higher levels of care beyond independent living) with little to no increase in residents’ monthly fees.
At Vi communities, a resident’s entrance fee is based on their chosen floor plan, care option and return option. (And depending on the return option they select, a portion of the resident’s entrance fee may be returned to a living heir after their death.)
A return option essentially refunds a portion of a resident’s entrance fee to a beneficiary of their choosing upon termination of their life-care contract.
Vi communities offer a range of return options, ranging from 0% to 90%.
Residents pay a monthly fee in addition to their entrance fee. The fee amount varies from community to community and depends on a variety of factors, but it generally covers services and amenities offered by the community.
At an inclusive CCRC, your monthly fee won’t change if your level of care does. At other communities, like Fee-for-Service, the monthly fee may increase with standard market rates.
Don’t hesitate to ask a community’s sales team for a history of monthly fee increases.
In general, the monthly fee accounts for everyday expenses.
This fee, again, will vary depending on the facility and the level of care the resident requires, the type of housing they choose, whether they rent or buy their homes, and the type of contract they sign.
In Vi communities, monthly fees cover services and amenities that include:
- Dining services
- Concierge/security
- Utilities
- Laundry/housekeeping
- Maintenance
- Lifestyle and fitness activities
- Transportation, parking, and valet services
- Long-term care
- Insurance and taxes
Ancillary items not included in the monthly fee also vary by community but could include additional meals, salon appointments or golf cart rentals, for example.
All senior living communities will address the issue of a resident whose financial situation changes drastically in their contracts.
At Vi and some other CCRCs, there is a financial underwriting process for prospective residents, which is intended to ensure that residents are financially qualified to live in the community.
However, in the event that you outlive your resources, a financial deferral process is in place whereby a resident may request a good faith deferral of a portion of the monthly fee under certain limited circumstances.
If you move into a Life Plan Community, a portion of your entrance fee may be considered a qualified medical expense.
That means you may be eligible to receive a one-time deduction for at least part of the nonrefundable portions of your entrance fee, in the tax year you paid it.
But each prospective resident’s tax and financial situation is different — this is not financial advice. So meet with your tax professional to discuss how much, if any, you can deduct.
Long-term care insurance benefits help mitigate the costs of higher levels of care but don’t completely cover them. Your benefits can align nicely with the services offered in Life Plan Communities.
But these policies are tailored to individuals — so be sure to bring this up with any retirement community you’re considering to discuss your personal circumstances.