Hidden Costs of Rental Communities

If you search online for “senior living communities near me,” you’ll undoubtedly find many different types of housing options available. The differences between them can be considerable, so it’s worth making sure you understand exactly what you’re getting with each to make an informed choice.

Rental communities are a popular pick, and not coincidentally, often appear to be the least expensive option. However, that doesn’t mean they remain the least expensive over time.

Let’s examine the differences between a rental community and a continuing care retirement community (CCRC, also called Life Plan Community) offering Life Care, such as The Glebe.

Two key factors are how fees are assessed and the levels of care that are offered on the premises.

Fees

Many people are attracted to the rental option because there are no upfront fees. You pay a monthly fee that’s determined by the level of care you need. If you initially move in as an independent living resident, but need assisted living, memory care or skilled nursing down the road, you’ll pay a higher fee for that care than you paid in independent living. . The rental option caters to your specific care needs on a month-to-month basis, and your fees increase as your needs do.

Like the rental model, the Life Care model requires you to pay a designated monthly fee. But you also pay an upfront entrance fee. This entrance fee ensures a contractual obligation on the part of the community to provide housing and priority access to a full spectrum of care services. This is where the “continuing care” part of their name comes from.

The key benefit is that you receive guaranteed care throughout your entire life. Also, your monthly fees remain predictable regardless of your level of care.

In communities with an entrance fee, portions of both your entrance payment and your monthly fee may be tax-deductible as prepaid medical expenses. In rentals, there are no tax deductions available for your fees. You should discuss the possibility of tax deductions with your accountant or financial advisor.

Health Care

Life Care communities have separate living accommodations that are licensed to provide services to residents who eventually require assisted living, memory care, or skilled nursing care, all assured with little to no  increase in your monthly fee.

Typically, a rental community will offer independent living and perhaps an assisted living facility. Some offer higher levels of care, such as memory care and skilled nursing care. Many rental communities offer supportive care services to residents only in their own apartment. Often these are contracted through an outside home-care services agency.

Unlike a Life Care community, there’s no contractual obligation for the rental community to provide additional care, so you may be required to move  out if your needs exceed what the community is able to provide.

You’ll o pay market rates for whatever care you need. With ever-rising market rates, necessary health care could cost many thousands more than expected. 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. Additionally, if you deplete your assets and can no longer afford the rental payments,  you would have to move out.

Intangibles

Beyond these substantial differences, there are some less concrete ones too. Living in a Life Care community affords a level of peace of mind that comes from knowing your care is set for life. You, and your children, won’t have to worry about finances or future care, which allows you to enjoy life more.

The lifestyle experience often differs as well, although this varies more by each specific community. Life Care communities often provide a higher level of services, amenities and activities than rental communities. At The Glebe, you’ll find stand-alone cottages and large apartment residences, an aquatic center, art studio, cultural activities – so many elements that contribute to  a picture-perfect retirement.

If you feel that a Life Care community like The Glebe might be the right retirement option for you or your loved one, let our experienced staff explain in greater detail the benefits of independent living with the safety net of on-site long-term care. Use the form below to schedule a virtual  visit, and we’ll be happy to answer all your questions.