How Do I Pay for Senior Living Costs?
Senior living in a great Life Plan Community provides a rich and interesting lifestyle and easy social engagement, as well as a continuum of care for evolving health needs. This type of security and enrichment offers outstanding value, but many older adults are concerned about how to pay for senior living.
What Are the Main Costs of Senior Living?
When exploring communities, you’ll find several different types of senior living contracts. Some communities offer rental contracts, which can seem appealing in the short term. If you’re a ealthy, active senior, you can pay a monthly fee and participate in the community lifestyle, but if at some point you need higher levels of care, your regular costs will go up significantly. Some communities with rental contracts offer higher levels of care, so you may be able to stay on the same campus, but many don’t, which could mean another move in your future. Another type of senior living contract for healthy seniors is a Life Care contract. With a Life Care contract, you enter the community as an independent living resident. You pay a one-time entrance fee and ongoing monthly fees, and you’ll have priority access to higher levels of care if/when you need it — with little alteration to their monthly fees.
What Is an Entrance Fee?
An entrance fee is a one-time payment at the beginning of a senior living contract. The entrance fee ensures priority access to the community’s health care services. With a Life Care contract, your monthly fees will remain predictable — even with added care services. With this agreement, you can avoid the price hikes and fluctuations in the health care market, often leading to meaningful savings over time.
Not all entrance fees are created equal. A refundable entrance fee is often a larger payment, but a large portion will be returned to you or your estate at the end of your contract. An amortized entrance fee will likely be smaller than the refundable option, but you’ll see no return after a certain amount of time has passed.
What Is a Monthly Fee?
A monthly fee encompasses the services and amenities provided at the community — meaning its value is more than rent or a mortgage payment. Your dining plan, housekeeping and maintenance services, fitness classes, cultural programming, lifelong learning opportunities and certain utilities are all included in the monthly fee. Depending on your current lifestyle expenses, combining all these services into one recurring payment could also save you money.
How to Pay for Senior Living
Even with the incomparable value offered by a Life Plan community, some seniors can experience sticker shock at first. But there are some smart solutions for how to pay for senior living and how to compare costs that can make the move seem more attainable.
Opt for Life Care
As previously mentioned, Life Care offers savings on future health services at the community. Additionally, your monthly fees remain more predictable under this agreement, making budgeting easier. Your entrance fee and monthly fees will depend on the size and location of your residence, as well as the number of people living there. You can choose a smaller floor plan to keep your senior living costs lower.
Make the Most of the Tax Benefits
Tax laws vary from state to state, but often a portion of the entrance fee and monthly fees in a Life Plan Community are tax-deductible. Because part of these amounts is designated to cover medical services, their deductions are similar to doctor bills. Ask your specific community and your accountant about possible tax savings.
Use the Proceeds from a House Sale
Many seniors reinvest the equity from the sale of their home into an entrance payment at a Life Care Community. After the value of that property has grown, they can take those funds and put them toward a more secure future with easy access to higher levels of senior health services.
Sign Up for the Flex Your Future Program
The Flex Your Future program a unique offering from communities like Cypress Village. Through this program, you can pay a smaller amount of your entrance fee up front and pay the remainder in installments on a flexible schedule. You can move in sooner — enjoy the lifestyle, services and amenities — and pay the senior living costs on your time.
When you’re ready to embrace your retirement life on your terms, Cypress Village is here to help you explore your options. If you’re still wondering about how to pay for senior living, give us a call. A member of our team would be happy to tell you more about the Flex Your Future program.