Whether you are looking into a Life Plan community for yourself or a loved one, there are many factors to consider; first is deciding between a rental community or an entrance fee – “buy-in” community. When comparing these two types of communities, many of the amenities and services offered are similar—the main difference is the financial model used by the communities.
A Life Plan Community, formerly, known as a Continuing Care Retirement Community or “CCRC.” offers independent living along with higher levels of care such as assisted living, memory care, and skilled nursing, often on a single campus.
A Life Plan “buy-in” community offers these levels of care with a one-time large buy-in or entrance fee. The entrance fee can range from tens to hundreds of thousands of dollars and sometimes over a million. A portion of the entrance fee may be refunded to you, or your estate should you decide to move out or when you pass away. Depending on how long you reside in a community like this, there may be no refund at all. Along with the entry fee, the monthly fee for independent living may be higher than a rental community. In some entrance fee communities, the rate for higher levels of care may remain the same as in your independent living residence and in others, it will be higher than your independent living monthly fee but not as high as the current “market” rate for that level of care. Essentially you will be paying a large entry fee and higher monthly fees for the care you may never need or utilize.
A Life Plan rental community also offers independent living options along with higher levels of care. That rental community however offers flexibility that entry-fee communities do not. To quote the poet Robert Burns “The best-laid plans of mice and men often go awry.” We have all experienced this in our own lives. Moving to a rental community allows residents much more flexibility as their plans may change. Many rental communities offer flexible lease terms to live in their community, such as short-term seasonal rentals, a yearly lease, or even longer for an opportunity to obtain a lower monthly rent or ensure there will be no rent increase for a specific amount of time. There may be a small administration fee to pay when moving into a rental community as well as a refundable security deposit usually equal to 1- or 2-months rent, however, the total amount is far far less than an entry fee community. When your needs change and you need a higher level of care, a life plan rental community offers these areas as well. The monthly rent would be comparable to other assisted living, memory care, or nursing communities in the area. As mentioned above, the benefit of a rental community is you will not be paying an exorbitant entry fee or higher monthly fees for services you may never need or use.
A rental life plan community gives you all the options, amenities, and services provided by an entrance fee while allowing you to continue managing your financial investments on your terms. The freedom to travel, provide for your family’s future financial security, and ensure you have a plan for your changing needs are just a few of the ways a rental life plan community can provide comfort and support to both you and your family. You have worked hard all your life, and a rental community can help you protect your retirement savings and take away some of the stress that comes from worrying about your finances and your future.