How Much Does Senior Living Cost? Rental vs. LifeCare®
Don’t be fooled by the first numbers you see. The real cost of senior living incorporates many long-term factors, and the best communities have plans in place for your future health care. Entrance payments in LifeCare and Life Plan Communities cover many recurring expenses. Most significantly, LifeCare communities like The Heritage at Brentwood® offer a full continuum of care, which saves you money and stress down the line if you find yourself needing more help and higher levels of care.
Without an entrance payment, the low upfront cost of senior rental communities (also known as 55 and older rentals because of the minimum age threshold) will likely be dwarfed by long-term costs that are not covered within their contract. Here are some of the hidden expenses you should look out for if you choose a rental community.
- Rising Rent Prices
Rental rates are tied to the general housing market and are therefore always in flux. Chances are, your rent will increase every year. The rate of increase will be largely unpredictable, making it hard to plan your expenses too far in advance.
- Full-Price Health Care
Senior rental communities likely won’t provide on-site health care. Even if they do, the care will not be covered in your fees, so you will pay market rates for whatever care you need. While it may seem cheaper to only pay on an as-needed basis, the data tells a different story. The U.S. Department of Health and Human Services reports that 70% of seniors 65 and older will need some type of long-term care — with an average stay of approximately 3 years.
With ever-rising market rates, necessary health care for you or your spouse could cost thousands more than you expected. By contrast, at a Life Plan Community you are assured long-term health care with virtually no increase to your monthly fee.
- Multiple Moves, Multiple Rents
If you are living in a rental community and you or your spouse at some point require long-term care, you will have to reevaluate your living arrangement again. One of you may move into a care facility at that point, but then you would be paying two rents. You may decide at that point to move together into a care community, although it can be trickier — and sometimes more expensive — to move into a community when you require two different levels of care. If you move to a Life Plan Community before either of you needs care, you will have priority access to the assistance you need, and you will avoid the stress of another move.
- Cost of Utilities
In senior rental communities, you are still responsible for utilities like water, gas, electricity and cable, as well as any additional housekeeping and laundry services you require. At most Life Plan Communities, these utilities are included within the regular monthly fee, which means fewer unwelcome surprises.
- Unoptimized Taxes
Portions of both your entrance payment and your monthly fee in a Life Plan Community may be tax-deductible as prepaid medical expenses. In 55 and older rentals, there are no tax deductions available for your fees, and you will also be responsible for the real estate taxes. Your tax consultant can offer more details.
As you are mapping out your retirement years, make sure you consider every factor involved in the cost of senior living. Rental communities can offer a short-term solution for downsizing and reducing some home maintenance, but don’t underestimate the peace of mind you could feel with a smart health care plan in place for the future. A Life Plan Community that offers LifeCare, like The Heritage at Brentwood, could be the best investment you’ve ever made.