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How Retirement Community Costs Compare

Claire Samuels
By Claire SamuelsSeptember 21, 2020
Elderly couple sitting on a couch calculating costs of moving to a retirement community.

You’re active, healthy, and looking forward to enjoying retirement. Whether you prefer the adventure of a downtown apartment, the neighborly feel of a planned community, or the security of continuing care, there’s a retirement community to fit your lifestyle. Retirement communities offer aging adults maintenance- and stress-free living alongside other seniors with similar interests.

When choosing a retirement community, it’s important to think about your interests, needs, and, of course, costs. Learn about the cost of retirement communities like 55+ apartmentsindependent living facilities, and CCRCs. Compare fees, amenities, and price structures to find the best option for you or your aging loved one.

55+ communities and senior apartments costs

Senior apartments and planned communities come in a variety of forms. Some 55+ communities offer condominiums, townhomes, or freestanding houses, while senior apartments are multifamily properties. To buy or rent in these communities, residents generally need to be 55 or older.

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Cost of 55+ retirement communities and senior apartments

Retirement community costs depend on the size of the unit, available amenities, and location. Generally, prices fluctuate with the housing market, so the average cost of a retirement community is hard to pinpoint. 55+ communities can range from economy apartments for less than $1,000 a month to purchased homes for $1 million or more.

The cost of living in a 55+ planned community is usually about the same as purchasing a house in any planned community. Number of bedrooms, included features, and location affect pricing. Many seniors see a home in a 55+ community as an investment opportunity, or they may use the money from the sale of their former house as a down payment on retirement living. Homeowner’s association (HOA) or entry fees may cover lawn care, snow removal, and senior-specific amenities.

Senior apartments – and some homes in 55+ planned communities – may be available for rent. They generally offer long-term or annual leases, unlike assisted living communities, which often rent month-to-month. Monthly rent will be calculated based on cost of living, size of the home or apartment, etc. Renting in a senior apartment or 55+ community home may be more expensive than a typical rental because of additional amenities or up-front costs. 55+ housing is generally designed according to the Americans with Disabilities Act (ADA) standards, with grab bars, widened doorways, and ground-level entry or elevators.

Some communities that advertise as senior apartments are rent controlled or subsidized. This means they’re only available to aging adults who make less than a certain income each year. New residents must be 62 or older. These apartment buildings can be found through the Department of Housing and Urban Development; they often have waiting lists.

How to pay for 55+ communities or senior apartments

Senior apartments generally have standard, long-term leases with rent due each month and little to no up-front entrance fee. Rent typically includes access to senior-accessible amenities like fitness centers and pools in higher-end buildings, and communities may offer planned activities. On-site security, staff, and maintenance provide peace of mind in 55+ communities.

Optional services like housekeeping and dry cleaning may be offered by outside companies for an additional fee.

Homes in in 55+ communities are purchased like any other houses. Seniors will have to secure a mortgage and provide a down payment. Some 55+ communities require buy-in fees to cover amenities, like pools, parks, and senior centers, along with landscaping and maintenance. Again, communities may have a list of recommended vendors to provide additional services for a fee.

Some apartments or planned communities may charge residents a monthly or annual fee in addition to their rent or mortgage, like an HOA or resort fee, to cover maintenance and amenities.

Independent senior living costs and features

Independent living communities are designed for older adults who want a maintenance-free lifestyle but don’t need full-time medical or personal care. Most independent living communities don’t provide assistance with activities of daily living (ADLs) or the individualized care assisted living and memory care facilities offer.

Cost of independent living communities

The median monthly cost of senior independent living in the U.S. is $2,552, according to A Place for Mom’s 2018 cost index. That’s about $1,400 less a month than the average cost of assisted living. However, independent living costs vary by supply and demand, geographic location, floor plan, and available amenities.

What do independent living costs include?

Independent living is designed for healthy, active seniors interested in communal amenities as well as individual services like housekeeping and meal preparation. Homes and apartments often include private kitchens or kitchenettes, safety alert systems, and accessibility features.

Unlike a 55+ community or senior apartments, independent living is usually all-inclusive. Utilities, landscaping, and security are usually features bundled into rent payments. In addition, independent living amenities like light housekeeping, transportation, and senior-oriented activities are included in monthly costs.  

How do independent living payments work?

Longer-term leases are standard for independent living, though some communities offer month-to-month options like assisted living. If you’re concerned about having to move out of an independent living facility because of care needs, talk to the property manager about a shorter lease.

The cost of independent living isn’t covered by medical insurance, since medical assistance isn’t provided by the community. It may be covered by long-term care insurance or a pension, depending on the plan.

Some communities offer tiered pricing packages — for example, an elderly adult who cooks meals in their own apartment would pay less than someone with a meal plan at an on-site cafe.

Depending on the community you choose, there may be extra costs for:

  • Renter’s association fees for maintenance, services, or special activities.
  • A one-time admission fee to cover apartment preparation. This could range from a few hundred dollars to several months’ rent.
  • Vehicle storage, like a carport, garage, or parking space.
  • A la carte services, like dry cleaning, meal delivery, haircuts, or massages.
  • Pet rent and a pet deposit. Most pet-friendly communities allow select furry friends. Pet policies vary by location, so ask the sales team about pricing and restrictions.
  • A roommate, spouse, or friend. Some communities charge an extra fee to cover additional people.

Continuing care retirement community costs and features

continuing care retirement community (CCRC) — also called a life plan community or life care community — must include independent living options as well as assisted living and skilled nursing. CCRCs offer an engaging lifestyle for independent seniors who wish to remain in one community as their care needs increase.

Continuing care retirement community costs

Independent living costs in a CCRC will be much higher than those in a freestanding community, but can be viewed as an investment in a senior’s future care. Significant entry fees or monthly rents allow aging adults to receive more care as their needs increase and they become less independent. When a resident moves from the independent living section of a CCRC into assisted living, their monthly rates will remain consistent.

About two-thirds of CCRCs charge an entry fee, according to a CCRCs market report from commercial real-estate services firm CBRE. The average initial payment is $329,000. In some CCRCs, up to 90% of the entrance fee is refundable to you or your beneficiaries when you leave the community.

Monthly costs after entry can vary dramatically by location and amenities, with an average cost of $2,000 to $4,000 a month, according to CBRE.

Other CCRCs operate on a rental model with no up-front fee. Rent for an independent living unit is often $3,000 to $6,000 a month.

What’s included in CCRC costs?

The higher costs associated with continuing care retirement communities do cover more benefits — mainly peace of mind for seniors who wish to remain in place as their health declines. When aging adults move into the independent living neighborhood of a CCRC, they begin paying for future care as well as current amenities.

High monthly payments and entry fees at life care communities can be seen as an investment for future care. Since rates generally don’t increase when seniors move from independent living neighborhoods to nearby assisted living or skilled nursing facilities, the higher cost of later-in-life care is distributed over time.

How are CCRC payments structured?

In addition to entrance fees and monthly costs, CCRCs generally determine payments through one of three fee structures: 

  • Extensive contracts give residents unlimited access to health care with little increase in fees. Seniors will pay a significantly higher price for independent living than they would outside a CCRC.
  • Modified contracts allow residents to pay for health care as needed alongside monthly maintenance fees. This can be helpful if an independent resident suffers an injury or requires rehab.
  • Fee-for-service contracts require separate payment for all health care costs. This could be the least expensive way to pay for retirement living in a CCRC. However, costs may add up in the future if assisted living and nursing care are needed.

Claire Samuels
Author
Claire Samuels

Claire Samuels is a content writer at A Place for Mom. She worked with senior living communities throughout the Midwest before pivoting to writing. She’s passionate about sharing ways of living well at any age.

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