The Cost of a CCRC/Life Plan Community vs. the Value to Residents

By Brad Breeding | MyLifeSite

A few weeks ago, I shared a blog post, which discussed some of the reasons why it is wise to make a move to a continuing care retirement community (CCRC or life plan community) sooner rather than later. Among the advantages of moving to a CCRC/Life Plan Community sooner, it can be easier to get acclimated and settled in to a CCRC at a younger age, you can begin taking advantage of the many wellness programs that can improve your long-term health, and you can form relationships that will serve as a support system should health issues arise.

In the post, I also shared some of the common reasons that people give for putting off their move: feeling like they are too young, concerns about downsizing and getting rid of all of their "stuff," and worries about long-term affordability and running out of money.

A real-world experience

In response to my blog post, I got an insightful email from a current resident of a CCRC in California, who I'll refer to as Sarah. In her email, Sarah agrees that many people do put off their move based on the concerns I noted in my blog post, but she adds one more to the list: concerns because the "fixed costs" start, including the often sizable entry fee.

And she's right. Depending upon which CCRC/Life Plan contract type you choose, when you make the move from your current home to a CCRC/Life Plan community, you must not only pay the entry fee, which can be a 6-figure amount, your monthly expenses do become somewhat fixed. And for some people that monthly dollar amount looks daunting. This is likely why I often hear people say that, while they would like to move to one of these communities, they believe staying in their home will be less expensive on a month-to-month basis.

But as Sarah notes in her email to me, she and her husband have found that, in actuality, many of their monthly expenses have gone down since they moved to their CCRC. Of course, this is just one person's experience, and your situation could be different.

For one, Sarah says, her property insurance has decreased dramatically, going from a costly homeowner's policy to a much more economical renter's policy. Although she didn't mention it, CCRC/Life Plan residents also no longer pay personal property taxes, which can be quite hefty in some states. Sarah also remarks that their monthly CCRC bill includes things like home maintenance and lawn care, which can either be expensive for a homeowner, or can take up a lot of their leisure time (not to mention the sore muscles!).

As for their monthly entertainment expense, that's gone down too. "There's a shop and a crafts/sewing room," says Sarah. "Free movies are shown, free concerts happen downstairs more often than we used to go in New Jersey, and our community celebrates holidays with glee and special decorations, and great brunches."

>> Related: Crunch the Numbers: Staying in Your Home vs. Moving to a CCRC

Another cost-savings

Another big expense that has virtually disappeared is Sarah and her husband's transportation costs. "We haven't bought a car, and may not. Why? Because the facility actually offers transportation," she explains. She goes on to say that the community van takes them to church on Sundays, and the community also provides transportation at a reasonable price (less than a Lyft or Uber) to go to doctor's appointments, thus eliminating the cost of parking and the headaches of traffic. Her retirement community also arranges group trips to places like Yosemite and San Francisco.

In addition to using the city buses, which are free for seniors in her city, Sarah shares that her community has communal bicycles and adult trikes equipped with baskets, which they take to do most of their grocery shopping and are able to enjoy on the area's many bike paths and greenways.

Sarah sums up that their "cost of new car, maintenance, gas, and insurance are currently zero."

>> Related: "…but I love my home": Is Staying in Your House the Right Move?

A price worth paying

So, while the monthly expense of a CCRC may seem a bit pricey at a glance, as Sarah says in her email, when you take into account what you get for your money, "the TOTAL monthly cost isn't that bad, and the convenience makes it very worthwhile."

Again, this is just one person's experience, and monthly costs can vary based on your CCRC/Life Plan contract type, your personal expenses, and the various offerings at your particular retirement community. This also doesn't include the entry fee that is applicable at most CCRCs/Life Plan communities, which is typically covered by the proceeds from selling a home.

It's also important to keep in mind that some expenses do not go away regardless of where you live, such as doctor visits, Medicare, certain other insurance premiums, etc.

But when you look at the cost of a CCRC/Life Plan community versus the value you get for your money—the services and amenities, on top of the availability of a continuum of care services if needed—many people come to the same conclusion as Sarah that the benefits that come with living in a CCRC/Life Plan community make the cost seem much more reasonable.

Crunch your numbers

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