In an effort to bring you information that is most valuable to YOU, we’re starting a new blog series, called “From Your Vantage Point.” In this series, we’ll address some frequently asked questions we get from potential residents and their family members. Today, we’re talking about senior living and money – particularly, the cost of senior living and why many (understandably so) are often taken aback when they view the pricing of senior living communities.
First, let’s address the elephant in the room: senior living IS an expense, and a high one at that. But simply asking the question, “Why is senior living so expensive,” does not always provide the best context. After someone asks us this question, we like to dive a bit deeper to better frame this quandary. For example, is the person speaking about independent living, assisted living, or memory care? Has this person researched senior living communities in the past or are we their first inquiry? If they’ve looked at communities before, what type? Have they researched both continuing care retirement communities and monthly rental options? Depending on the follow-up question we’re able to provide good answers. Here are the top four answers we provide people:
Answer #1: You’re not just paying for the rent of an apartment. This is probably the most basic and easily understood answer. When you move to a senior living community you’re renting an apartment, but you’re also receiving a variety of services and amenities – most included in your monthly fee. The cost to staff, supply and maintain such a service oriented operation comes at a price. Additionally, property taxes, most utilities, maintenance, landscaping, snow removal, etc. are generally covered through your rent. Usually, a person who has not inquired at a senior living community will experience this initial sticker shock… but upon explaining all that is included in addition to basic rent, the concept becomes clearer.
Answer #2: It depends on the community type. This builds on the previous answer, because the costs of senior living vary depending on the types of services a resident wants and/or needs. Independent living is typically less expensive than care options like assisted living and memory care because, as its name indicates, residents live independently in their home. Sure, you’re paying for exceptional amenities and quality services, but you don’t need someone checking on you throughout the day and/or providing hands on care. In assisted living and memory care, you’re receiving additional services and amenities like independent living, but you’re also receiving the peace of mind knowing someone is available to care for you around the clock.
Answer #3: It depends on the fee structure. There are essentially two basic types of fee structures in senior living: monthly rental and entrance fee. When a resident moves into a monthly rental community, initial fees are typically similar to a security deposit in any apartment. These fees can range from a flat fee of $500 (for example) to one or two month’s rent. In an entrance fee community, residents pay a much larger upfront fee, typically six-figures, and have a lower monthly rate by comparison. These upfront fees offset the cost of monthly expenses, but they also serve to fund your future care, if you should ever need it. Whether or not your upfront fee is refunded to you or your estate depends on the terms of your contract
Answer #4: It depends on location. The cost to live in a community in a city center will be significantly more than a community in a rural area. This is because the cost to purchase, build, and pay taxes on the overall property must be considered when establishing pricing a community must pass on to the resident. The cost of living in an area must also be taken into account, since communities must employ staff to provide services and care to residents, and employees need to be paid fair wages that meet the area’s cost of living. So, while you may be looking at two communities that offer nearly identical services in nearly identical apartments, different geographic locations could explain a disparity in cost.
So while senior living can be considered expensive to the vast majority of people, it is not without reason. At Vantage Point Retirement Living we understand that the price tag of living in one of our communities comes with high expectations of quality and service. Being a regional operator allows our corporate team to be intimately involved in the operations of each community to ensure that residents receive all the services and amenities they deserve and expect.
In upcoming articles we’ll continue to tackle your questions and do our best to shine light on topics that matter to you. If you’d like to discuss senior living and affordability in more detail, we welcome you to reach out to us anytime! Just send us an email at [email protected] and we’ll look forward to a great discussion with you.