Moving to a Retirement Community vs. Staying Put: A Simple Cost Comparison

December 6, 2021

When it comes to retirement planning, one of the biggest decisions worth considering is where to live. For many, the idea of staying put in the same home, or at least in the same area where they’ve lived their adult life, is appealing—not to mention less stressful. After all, leaving the family home can be a big transition packed with all kinds of emotions.

 

However, many retirees are finding downsizing or moving into a senior community a better fit for their lifestyle, loaded with all kinds of financial benefits. As such, it’s important to do your homework and consider how your current/future costs compare to what you can expect to pay for in a Life Plan Community.

 

First, let’s break down what a Life Plan Community is and what you can expect by moving in.

A Life Plan Community (or LPC) is a residential community for active senior adults who are 62+. These communities highlight a variety of home options that range from independent living through assisted living, memory care, and skilled nursing. Having access to this continuum of care and living possibilities allows residents to age in place regardless of their future health needs. LPCs also feature an array of built-in services and amenities designed to help residents make the most of their retirement years and age successfully. These amenities include:

 

  • On-site gyms and fitness centers
  • Swimming pool access
  • On-site dining venues
  • Recreational events and activities
  • Continued education opportunities
  • Transportation services

 

Comparing the costs of living in an LPC.

There’s no fixed number for how much you might pay to live in a Life Plan Community—since the cost can depend on several different factors. However, most LPCs have a basic financial structure that can offer a general idea and help you compare costs.

 

LPC residents can expect to pay an entrance fee or entrance deposit. This one-time deposit is often refundable (up to 90%) and secures your residence for as long as you live in the community. Depending on the size of the floor plan, this fee can range from approximately $200K–$500K.

 

LPC residents can expect to pay monthly service fees. These monthly service fees can include everything from basic utilities to a monthly dining credit to be used at the on-site restaurants and markets. Depending on the size of the floor plan and number of occupants, this fee can range from approximately $1,800–$3,000 a month.

 

Some LPCs also offer a rental model that allows residents to bypass the entrance deposit by leasing their apartment for 12 months at a time for a set fee. This fee can range from $3,800–$5,600 a month depending on the floor plan and number of occupants.

 

LPC vs. staying put in your home

Now that you have a general idea of what life in an LPC costs, it’s time to see how it stacks up against what you’re currently spending where you live now. To do this, here’s a sampling of average annual spending for people (age 55 to 64), according to the U.S. Bureau of Labor Statistics for 2020:

 

  • $21,379 for housing
  • $7,292 for food
  • $4,508 for utilities
  • $1,262 for household operations
  • $1,003 for housekeeping supplies
  • $2,244 for household furnishings
  • $10,287 for transportation
  • $5,684 for healthcare
  • $3,521 for entertainment

 

If you add all these costs together, you get a grand total of $57,180 in expenses for the year. Compare that to living in a Life Plan Community at the median monthly service fee of $2,400 a month for housing, utilities, food, transportation, and health care ($28,800 for the year), and you’d come out ahead by nearly $30,000 a year.

 

So, what’s the bottom line?

Whether you stay put in your home or make the move to a Life Plan Community, there is an obvious financial benefit to understanding your cost-of-living bottom line for either scenario. As such, it is very important to carefully consider where you live and asses your options as they pertain to your short- and long-term goals for retirement. You’ve worked hard for this time in your life, and now is the time to make sure it works for you and the lifestyle you’ve always wanted.

 

At Summit Vista, we realize your expectations for retirement are ever-changing. You want to maximize every moment, discover new possibilities and, most importantly, find the peace of mind to achieve a happy, healthy future that’s free of concern. We want that, too.

 

For more information about volunteer opportunities available at Summit Vista or the benefits of moving into our Life Plan Community, speak with your retirement counselor, or call 801-758-3138 today.

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