Life Plan Community Financials, Explained

An important part of living mindfully is looking at our lives and clearly observing what is needed for our wellbeing. This not only includes caring for ourselves in the moment, but making intentional plans for the future as well. Zen teachings help us to remember there’s an important distinction between planning and worrying. Planning happens in the present moment, while worrying takes you out of it. Planning for the future, then, is one of the best tools for staying grounded in the present.

So let’s be conscious about making financial preparations, and look at those preparations through the lens of planning versus worrying — because here’s the honest truth: You spent your working years saving for your retirement. What have you saved for, if not for the opportunity to fully enjoy living in the present, knowing you have a smart plan in place so you don’t need to worry about what-ifs?

If you’ve been considering a move to a Life Plan Community but you’re not sure what that entails financially, we’ve included information to help explain. We’ve also included details regarding what those same costs might be if you stay in your own home.

When you compare the costs of a Life Plan Community versus aging in place, you might be surprised to discover how truly affordable senior living can be. You may also discover how living in a Life Plan Community can help you live more fully in the present, without worry.

At a Life Plan Community, you know your monthly and annual living expenses

One of the big fears older adults have is outliving their savings. According to a recent article, 49% of older Americans say their main retirement concern is running out of money. That actually beat out their concerns over their fears of declining health by 5 percentage points.

At a Life Plan Community, you pay two fees to become a resident. The first is an upfront, one-time entrance fee. This fee varies depending on the size of the floor plan and the type of residency contract selected, and may be repayable or nonrepayable.

Residents also pay a monthly service fee. The monthly service fee helps to pay for the costs of the services and amenities the community offers, and may include:

  • Housekeeping, laundry and linen service
  • Delicious and nutritious chef-made meals
  • All interior and exterior upkeep and maintenance
  • Landscaping and care of the community’s grounds
  • Organized transportation
  • Wellness opportunities and fitness center
  • Lifelong learning classes, courses, events and activities
  • Health care costs, if needed

A Life Plan Community informs residents of annual price increases in their monthly fees, and will provide you with that cost at the start of every year. This allows you to budget exactly how much money you’re going to spend over the course of the year.

Overall, your health care costs will almost certainly be lower than the cost if you moved from your home directly into a dedicated facility for assisted living, or memory care in the future.

At home, your living expenses can fluctuate every month, and every year

Even if your mortgage is paid off, homeownership comes with costs. You’ll always have ongoing expenses to maintain the value or the livability of your home, whether you do the work yourself or pay someone to do it for you.

Depending on where you live, how old your home is and what your square footage is, annual maintenance can cost between 1% to 3% of your home’s purchase price. Owners of a $200,000 house should expect to spend between $2,000 and $6,000 a year on upkeep.

That percentage, of course, fluctuates — especially if you need to replace any of these big-ticket items:

  • Roof and gutters
  • Siding
  • Water heater
  • Air conditioning and heating system
  • New driveway and sidewalk
  • New appliances

That’s just maintenance. You also need to figure on other costs, such as utilities, meals at restaurants, fitness membership, expenses for entertainment and more. Many of these expenses, by the way, are covered as part of your predictable monthly service fee, if you lived at a Life Plan Community.

If you plan to make your home safer for you to age in place, those enhancements or renovations can really add up. Remodeling a bathroom — like reinforcing walls to support grab bars, and putting in a comfort-height toilet and zero-threshold shower — could cost more than $15,000.

Costs of continuing care at a Life Plan Community are covered as part of your residency contract

The benefit of choosing a Life Plan Community is in the name itself: You’re choosing a community that provides you with a plan for life. Your entrance fee is largely repayable at the end of your stay. The monthly service fee is nearly all-inclusive with benefits like utilities, dining, housekeeping, maintenance, transportation, garage parking, and a full slate of activities.

If you need future care, that’s paid for in different ways, depending on the type of contract you choose. Here are the three common types of contracts:

• Life Care contract, also called Type A. This contract comes with the highest entrance fee, but if you need continuing care, you’ll receive unlimited assisted living, or memory care for life, generally at little or no additional cost.

• Modified contract, or Type B. This contract provides you with the health care you may need in one of two ways: either a limited number of free days of care included as part of the entrance fee, or at an ongoing, minimally discounted rate.

• Fee-for-service contract, or Type C. Your initial entrance fee may be lower, but you pay for any additional specific services you may need, such as assisted living, or memory care.

The costs of receiving care at home are your responsibility

Residents of a Life Plan Community initially move into independent living, then move to higher levels of care as it’s needed. Non-residents who need a higher level of care typically aren’t allowed to move directly into a level of care in a Life Plan Community.

What might that mean for you? If you’re living at home and you need care, your spouse or your family may need to find a care facility for you that can accept you as a resident — and make that decision quickly, during your health crisis, and possibly without your input.

While you may think you personally won’t need any care in your lifetime, your spouse may need it. People turning 65 today have a nearly 70% chance of needing some type of long-term care in their lifetimes.

You can certainly bring care into your home, if and when you need it. However, you’re solely responsible for finding and hiring those caregivers. You’re also solely responsible for paying for that care.

According to Genworth’s Cost of Care Survey, the median costs for care in the Santa Rosa area for in-home care start at $6,101 per month. Something important to note: Medicare doesn’t cover assisted living, so most people pay for it out-of-pocket or with help from limited coverage provided by long-term care insurance.

For affordable senior living, consider a Life Plan Community like Enso Village

You might be surprised to discover how genuinely affordable a Life Plan Community can be. But often, discovering the true value of a community involves so much more than just thinking about the price tag.

There’s also the value of connections, safety and security and peace of mind — all things a Life Plan Community can offer you that your home may not.

Learn more about what a Life Plan Community could bring to your retirement lifestyle, simply by reaching out to our senior living counselors at Enso Village. We’re here to help you look at the numbers, tally up the financials and decide whether we would be the right fit for your retirement future. To start the conversation, we invite you to contact us.