Retirement communities are increasingly popular among older adults seeking a comfortable, supportive lifestyle during their later years. They cater to individuals at different stages of aging by offering a range of living options and care, from independent living for those who are self-sufficient to assisted living and nursing homes for those requiring daily assistance with medical and personal needs.

However, deciding whether to move into a retirement community can come with significant costs, leaving many questioning whether these communities are worth the investment.

What to Consider When Moving Into a Retirement Community

Moving into a retirement community is a big decision that requires careful consideration of several factors, including the type of community you want, its cost, its location, and its amenities.

Start by researching your retirement community options, as each type of community varies in cost, amenities, activities, care options, and more.

• Active adult communities: Best for seniors 55 and up who want to maintain an independent and active lifestyle
• Independent living communities: Designed for seniors who do not require medical care or daily assistance
• Assisted living communities: Ideal for seniors who do not require full-time medical care but still need assistance with daily activities such as bathing and dressing
• Nursing homes: These provide 24/7 care for individuals who require medical attention and assistance with daily living activities.
• Continuing care retirement communities (CCRCs): These offer individuals a place to age in one location while transitioning to assisted living or nursing home options based on their medical needs.

Cost of a Community

The cost of living in a retirement community varies based on several factors, including:

Entrance Fees and Deposits

Entrance fees are one-time fees paid upon move-in and can vary depending on the community. For example, at a CCRC, entrance fees typically range from $9,000 (for the memory care segment) to more than $2 million (for a high-end CCRC), with an average initial payment of around $402,000.

Should the resident move out or pass away, a partial refund of the entrance fees may be granted to the individual or their estate. Carefully review your contract, refund policy, and conditions before moving in.

Monthly Fees

Monthly fees cover the cost of housekeeping, transportation, and other services and amenities. At CCRCs, monthly fees range from $2,500 to $6,000, but they can go up depending on the level of care needed.

Insurance can cover certain costs associated with living in retirement communities. Medicare, for example, can cover the cost of skilled nursing care, but it doesn’t cover custodial care or assistance with daily activities like dressing and bathing.

Medicaid and private long-term care insurance can provide additional coverage, depending on the individual’s circumstances and the insurance. Additionally, there’s potential to earn some savings during tax season, especially if medical expenses are paid out of pocket.

“Retirees should definitely consider the tax advantages of moving into a retirement community,” said Remy Dou, CFP and co-founder of Retirement Planning Center Advisory Group.

“For one, some of the costs related to living in the community, especially medical and long-term care expenses, might be deductible as medical expenses. On top of that, certain states offer property tax exemptions or reductions for seniors, which can ease the financial burden. It’s important to check out local tax breaks and see how they might apply to your situation to maximize savings.”

Own vs. Rent Your Housing

The cost can be influenced by whether you plan to rent or buy, as well as the floor plan and the size of the unit. So carefully weigh your needs vs. your options.

Type of Community

Consider how prices can vary based on the type of community. Independent living is typically more affordable than assisted living or nursing homes, which can cost from $64,000 to $117,000 annually.

“You’ll want to ensure that the costs fit comfortably within your financial plan, whether it’s monthly fees, entrance fees, or extra charges for things like healthcare. If you’re looking at a for-profit community, keep in mind that their contracts might change over time, which could impact your expenses,” said Dou.

Location Matters

Retirement communities are located nationwide, offering a wide range of options. The location of a retirement community impacts your lifestyle and overall quality of life as you age. It affects your access to family and friends, healthcare, recreational activities, and more.

Additionally, factors like climate and safety should play a part in your decision.

What Amenities or Services Do You Need?

The amenities and services available to retirement community residents are part of the allure. Offerings vary based on the community, but you’ll see a range of health and wellness, recreational, medical, and security options, including:

• Fitness centers
• Indoor and/or outdoor swimming pools
• Housekeeping
• Restaurants or cafes
• Games room
• Arts and crafts
• Security
• Maintenance
• Transportation
• Healthcare services
• Salons and/or barbershops
• Green spaces, such as patios and gardens

“It’s essential to make sure that the lifestyle you want matches the amenities and services offered by the retirement community. A good way to do this is by comparing the cost of services provided within the community versus what you would pay for them outside of it,” Dou recommended.

Research a Community’s Reputation

It’s important to consider the retirement community’s reputation, as this can give you insight into the quality of care and service and overall resident satisfaction. Google reviews and Trustpilot are great places to look if you want to know what people say before making big decisions. Search Google News for any negative reports about the facility.

If you can’t seem to get a clear picture from reviews and ratings, confirm whether or not the retirement community is accredited. This speaks to its quality and reliability. For example, CARF International ensures that accredited communities meet a high standard of care and that residents are provided with a safe, supportive environment.

“It’s also a good idea to research the community’s financial stability; after all, you want to avoid any situations, like bankruptcy, that could result in eviction or losing your entrance fee,” Dou told Investopedia.

Best Senior Living Facilities

Seniorly worked with Skypoint to mine and analyze customer and family reviews of senior living facilities to create a sentiment rating that includes staff ratings and overall resident satisfaction. They say their awards include only those communities with a sentiment rating in the top five percent and be free of serious licensing violations or recent negative media coverage. Their top 20 locations include:

1. Aegis Living Greenwood in Seattle, WA
2. Arbor Terrace Mount Laurel in Mount Laurel Township, NJ
3. Bardwell Residences in Aurora, IL
4. Creekside Village Retirement Residence in Beaverton, OR
5. Crofton Manor Inn in Long Beach, CA
6. Five Star Premier Residences of Dallas in Texas
7. Grossmont Gardens Senior Living in La Mesa, CA
8. Islan House in Mercer Island, WA
9. La Siena in Phoenix, AZ
10. Maravilla Scottsdale in Scottsdale, AZ
11. Merrill Gardens at Solivita Marketplace in Kissimmee, FL
12. MorningStar of Fountain Hills in Fountain Hills, AZ
13. Pacifica Senior Living Palm Springs in Palm Springs, CA
14. Summerfield Senior Living in Bradenton, FL
15. TerraBella Myrtle Beach in Myrtle Beach, SC
16. The El Dorado in Richardson, TX
17. The Hacienda at The Canyon in Tuscon, AZ
18. The Heritage Tradition in Sun City West, AZ
19. The Palms at Plantation in Plantation, FL
20. Truewood by Merrill, Cottonwood Heights in Cottonwood Heights, UT

The Bottom Line

A retirement community can be ideal for those who value convenience, community, and support. Since the options include communities that cater to various stages of aging, it’s possible to find a living arrangement that aligns with your changing needs, ensuring ongoing comfort. Take time to explore your options, comparing your needs and budget to what you’ll get in return.