How Much Money Do I Need To Move Into A Senior Living Community?
If you’re retired, one of the biggest decisions you’ll make involves your quality of life. Many retirees find it overwhelming to factor the cost of their current lifestyle. But fortunately, it might be more affordable than you think in a senior living community. There are several different senior living options, but most offer several benefits when it comes to services, amenities and wellness. However, it’s equally important to consider the total cost and how it compares to other housing options. In this article, we breakdown the monthly expenses of retirement communities and review financial tips to help you get started.
Entrance Fees In A Senior Living Community
According to a senior housing report from CBRE, almost two-thirds of senior living communities charge an entrance fee to their residents. The average cost of move-in fees range from $20,000 to $329,000, but some communities charge an upwards of $1 million. Although entrance fees may vary from place to place, one fact still remains the same: joining a retirement community requires a significant financial commitment, but it could be well worth it in the end.
Monthly Fees In A Senior Living Community
When you move into a senior living community, you no longer have to worry about expenses such as property taxes, home insurance, utilities, and maintenance because it’s all covered under a monthly service charge. Additionally, you’ll receive a meal plan, transportation, access to health and wellness facilities, vocational classes, shared community spaces and much more.
Assisted living and independent living communities typically have a monthly fee that could range from $1,500 to $6,000–depending on the community, apartment size, and the number of services you’ll need. If you’re interested in moving to a Life Plan Community, then you can expect to pay between $1,000 to $5,000 or more.
Want to know if you can afford retirement community living? Our financial calculator will help you determine your current and potential costs, helping you make the best financial decision for your desired lifestyle.
Financial Tips for Senior Living Planning
When it comes to making financial plans for you or a loved one, many people aren’t prepared for the future. Regardless of where you are in retirement, financing senior care is not something you should wait on, it requires a lot of thought, time and preparation. Here are five helpful tips on financial planning for senior living.
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One of the most impactful considerations for a senior’s quality of life is healthcare costs. Read our eBook, “The Complete Guide to Managing Elderly Healthcare Costs” for the financial insights you need to help you make an informed decision.Download the Guide
1. Talk To A Financial Advisor
Getting expert advice from a financial advisor can help you achieve your financial goals and save money. They are often responsible for creating financial plans such as savings, budget and tax strategies. If you have financial questions that require tough decisions like using reverse mortgages or selling a life insurance policy, we suggest contacting a financial advisor or senior care manager for more information.
2. See If You’re Eligible For VA Benefits
Those who qualify for a Veterans Affairs pension, or who have documented physical or mental restrictions, may be eligible for an increase in monthly payments. To get these benefits, a veteran must have served during a period of conflict, meet minimal age or disability requirements, and fulfil certain income restrictions. In addition, surviving spouses must meet certain conditions as well.
More details on VA guidelines can be found here.
3. Understand Pricing For Your Level of Care
One of the first questions seniors and their families often ask is, “how much does senior living cost?” Understanding entrance rates, monthly fees and the levels of care offered in a retirement community will help to narrow your search and budget for the future. The cost of senior living varies, depending on the type of care you need, and personalized accommodations such as health care, housekeeping services and assistance with activities of daily living (ADLs).
We have detailed some average senior living community rates below.
4. Consider Senior Tax Breaks
The Senior Tax Credit (also known as Credit for the Elderly or Disabled) is a federal policy that can be applied to your tax returns if you are 65 and up or have a disability. Retirees may find that what they file for changes because of new sources of income. To qualify for a senior tax break, applicants must:
- Be a U.S. citizen or resident alien, some exceptions apply depending on marriage laws.
- Be at least 65 or older by the end of the tax year or retired under permanent and total disability.
- Meet the income restrictions below (as of 2020):
To see updates on eligibility restrictions and tax credit terms, please visit the IRS publication website.
5. Take Advantage Of Free Resources
Gaining financial knowledge is important any age, especially when you’re retired. There are many great resources to help you take control of your financial planning.
At Senior Lifestyle, we’re committed to providing families and their loved ones with the right tools, resources and information to help you make informed financial decisions. Check out these handy guides, calculators and blog articles for additional details on senior finance.