Moving to a Life Plan Community: Planning Ahead for Financial Readiness
Over the past decade, there has been a noticeable shift in the average age of individuals and couples applying for residency at Homestead Village. We have seen applicants as young as 62 (our minimum age) with many applicants joining the ‘Priority List’ around 70-75 years of age. The antiquated sentiments of avoiding “the home” at all costs has now transformed into the understanding that having a solid plan for one’s future is very, very important. Adding to the value of a plan for high quality care services is the evolution of the communities themselves to thriving campuses filled with activity, vitality, and beautiful housing options.
The financial aspect of thriving after retirement can feel overwhelming, but understanding the costs, benefits, and available options can help you make a well-informed decision. When weighing the cost of senior living communities against the expenses, responsibilities, and unknowns of remaining at home, many find that a Life Plan Community provides greater financial predictability and peace of mind. Additionally, non-profit communities like Homestead Village give peace of mind to residents, who will be cared for even if they exhaust their financial resources.
Understanding Your Current Financial Situation
The first step to understanding financial readiness for a thriving retirement is to assess your current financial picture. Consider these key factors:
• Monthly expenses: What are you currently spending on your mortgage or rent, utilities, home maintenance, property taxes, homeowners’ insurance, and home care or home maintenance services. Are you working to pay off debts?
• Consider future healthcare costs: As needs evolve, the costs of home modifications, medical care, or caregiver assistance can quickly add up. A willing spouse may find themselves burnt out with their efforts to provide care for their loved one, resulting in injury or illness and landing in an “oh no” moment.
• Savings and income: Look at retirement accounts, pensions, Social Security, and any other financial assets that contribute to your long-term security.
• Long Term Care Insurance: Ask your financial advisor if Long Term Care Insurance makes sense for you. For some it may not be worth the high monthly premium, but for others it may help extend the life of their assets if they require long term care.
By evaluating your current expenses and comparing them to your expected expenses and benefits received at a Life Plan Community, you will likely discover that a Life Plan Community is a good value.
How much does it cost to live in a retirement community?
Life Plan Communities operate on a model that provides a full continuum of care, including independent living, personal care (at Homestead Village we call it Supportive Services), memory support, skilled nursing, rehabilitation, and more; ensuring that residents have access to necessary services within the community campus.
The average cost for senior living typically includes:
• An entrance fee that varies based on location, residence size, type, and contract options. At Homestead Village, Entrance fees range from just under $80,000 for an apartment, to over $400,000 for luxury carriage homes.
• A monthly service fee that covers housing, amenities, life enrichment and wellness opportunities, maintenance, meal allowance, medical transportation services, and access to healthcare services including emergency response. Homestead Village monthly fees range from just over $2,000 up to the mid $3,000s for residential independent living.
• Access to dependable care is available on a fee-for service basis. At Homestead Village, (A Type B Contract) fifteen days of skilled nursing per resident per year are included as an added benefit to residents. Our THRIVE team also provides education, care coordination, and support to residents when they need it. Homestead Village Home Care services provides yet another way to access support.
While living in a Life Plan Community is not inexpensive, it provides predictability at many levels by reducing the uncertainty of rising home expenses, maintenance expenses, and peace of mind should unexpected healthcare needs arise.
The Financial Approval Process
When applying to become a future resident at a Life Plan Community, it is standard practice for all applicants to complete a financial application. The financial approval process is not meant to be invasive of anyone’s privacy, but rather to ensure the applicant’s financial health throughout their expected time of residency at Homestead Village. Additionally, because of our commitment to providing benevolent care to those who outlive their financial resources, Homestead Village is essentially guaranteeing* personal care and nursing care services for all residents. These services become increasingly costly over time and as one moves through the continuum of care.
Due to increased costs as additional care is needed, residents will deplete assets at a higher rate as their needs progress. So, even if an applicant can demonstrate the ability to cover the initial entrance fee and independent living rates, they may not financially qualify for residency due to the inability to afford future healthcare costs. The financial application process is about finding the balance between assets, income, and projected expenses and ensuring that potential residents can meet current and future care obligations.
The younger the applicant, the more assets they will need to have, to demonstrate ability to cover expected costs for a longer period of time. However, waiting too long to make a move results in limited options being available and potentially even a crisis situation.
Want to see if Homestead Village is a good financial fit for you? Get a personalized assessment by completing our financial survey. If you would like a more detailed review, or have questions about the financial survey results, we recommend completing our standard financial application.
Don’t put off planning for a thriving future at a life plan community because of these misconceptions:
• “It’s too expensive.” In reality, many retirees find that with the sale of their home and proper financial planning, Homestead Village is well within reach.
• “I want to leave my assets to my family.” While estate planning is important, a Life Plan Community provides stability, reducing financial and emotional strain on loved ones. Also, Homestead Village’s Plan II Estate Preservation Plan Contract offers a refundable portion of 60% of the entrance fee paid.
• “I don’t want to lose control of my assets.” Don’t worry! At no time will a Life Plan Community take control of anyone’s assets or house. We simply send a monthly bill for services received, which the resident will then pay. If the resident is unable to manage their finances independently, a financial power of attorney of the resident’s choosing can provide assistance.
• “I’m not ready yet.” Moving earlier allows you to take advantage of the vibrant lifestyle and security a Life Plan Community offers, rather than growing isolated in one’s home, or making the transition in a time of crisis. The longer you live at the community, the greater value you gain from the entrance fee that you have paid.
Making a Financially Sound Decision
When considering a Life Plan Community, take the time to understand the full financial picture. Schedule a meeting with your financial advisor, and research the variety of communities here in Lancaster County – all who have wonderful counselors who can help you navigate the available options.
At Homestead Village, we offer a wide range of entrance fee options. Contact us today to learn more about why making the move to a Life Plan Community is a smart investment in your future.
Disclaimer: Any financial information provided is for general informational purposes only and should not be considered professional advice. For personalized financial advice, please consult a certified financial planner.