In a recent post, I described the various types of independent living senior housing providers and some of the ways to distinguish one type from another. In this post, I want to address another popular question: What is the cost of senior living?
According to the National Investment Center for Seniors Housing and Care (NIC), there are approximately 4,060 retirement communities in the United States that are classified as majority independent living. This category includes retirement communities that primarily serve those who are able to live fully or mostly independently. Approximately half of all majority independent living communities are rental communities. The other half require an entry fee or purchase, which is typical among most continuing care retirement communities, also referred to as CCRCs or life plan communities.
Monthly cost of senior living can vary dramatically
NIC’s 2014 Investment Guide shows that the average monthly cost of senior living for majority independent living communities is $2,765, although pricing may range anywhere from several hundred dollars per month to upwards of $9,000 or more for ultra-high-end providers.
The cost of senior living varies dramatically based on four main criteria: breadth of services, amenities, size of the residence, and location. A retirement community in the heart of San Francisco, for instance, would almost certainly cost significantly more per month than a comparable property in rural Kansas, perhaps even two or three times as much. A provider with only a few on-site activities would cost less per month than a provider offering transportation services, an on-site wellness center, swimming pool, access to healthcare, and other services.
À la carte or all-inclusive?
When comparing the cost of senior living, it is also important to keep in mind that the published rate for some providers is a base rate, and residents pay extra for certain services and amenities. Other senior living providers operate under an all-inclusive arrangement, whereby most everything offered is included in one monthly rate.
Entry fee retirement communities
Included within the category of majority independent living are most continuing care retirement communities, which typically offer residents access to a full continuum of care in one location. Therefore, in addition to independent living, residents have priority access to assisted living, memory care, and/or 24-hour skilled nursing care as needed. Ideally, a resident of a life plan community will never have to move again as their healthcare needs increase, except perhaps to the on-site care facility.
In exchange for the contractual promise of lifetime housing and access to care services, most CCRCs require an entry fee in addition to their monthly service fees. The average entry fee for CCRCs is approximately $250,000 but this, too, can vary dramatically based on similar criteria as described above. Yet, as it relates to CCRCs in particular, the other factor that impacts pricing is the type of residency contract. There are a number of different types of CCRC contract types available in the marketplace, some of which are refundable. See: CCRC contract types
According to the CCRC database at myLifeSite– which covers over 500 providers across the country- average entry fees range from approximately $107,277 on the low end to $427,054 on the high end (across a blend of contract types). Average monthly service fees range from $2,089 to $4,154.
One other thing to note is that there are some CCRCs who do not require an entry fee. All other things equal, the monthly fee will almost always be higher at a rental CCRC than at a comparable entry fee community.