Evaluating Senior Living Facility Options
/It is a challenging situation when the realization hits - be it for you or a loved one – that perhaps it is no longer a feasible option to continue in the current living situation. If and when this time comes, considering some of the senior living options that are available and what might be best, can be challenging.
It is important to find a living arrangement that meets your health, social, and lifestyle needs, but also ensures a clear understanding of the costs involved. Having clarity regarding the financial aspect of different senior living facilities should be a priority from an overall financial planning and future cash flow standpoint.
Understanding not only what type of senior living options are available, but also that the costs can vary greatly depending on the type of community desired, the level of care needed, and the amenities desired, is key before deciding on where to move.
Options: Overview of Senior Living Facilities
When it comes to choosing a senior living community, understanding the various types available helps find the best choice for your situation. The four most common options available for senior living today are:
Independent Living Communities
Assisted Living Communities
Skilled Nursing Care Communities
Continuing Care Retirement Communities (CCRC)
Independent Living Communities
Independent living communities cater to self-sufficient older adults who want an active and socially fulfilling lifestyle and don’t require aid for daily tasks. These communities allow residents to connect with those of a similar age group, often by offering a range of recreational, social, and physical activities.
With a focus on independence, these communities generally do not provide extensive healthcare services, making them ideal for those who don’t require or expect to require medical attention but are looking to downsize.
There are various independent living options for seniors including apartments, condos, cottages, and townhomes. Many provide essential services like dining options and amenities like fitness centers and regular housekeeping.
Assisted Living Communities
Assisted living facilities provide a more supportive arrangement and are designed for those who require some support with activities of daily living (ADL) such as bathing, feeding, dressing, and medication management, while still ensuring access to a range of social activities and amenities.
These communities provide a special combination of residential housing and healthcare services for adults where safety may be a concern if living alone.
The primary emphasis of the Assisted Living Community is to provide tailored personal care services for its residents, while still allowing as much independence as possible in a supportive environment.
Skilled Nursing Care Communities
Skilled nursing care communities, or nursing homes, are an ideal senior living option for those in need of 24/7 nursing care due to complex medical needs or chronic conditions that exceed what assisted living communities can provide.
These facilities specialize in tailored care and housing for individuals with significant health problems such as Alzheimer's, dementia, or related diseases. With continuous medical attention from in-house nurses, doctors, and other healthcare professionals, skilled nursing care communities ensure a higher level of medical support for their residents.
Continuing Care Retirement Communities
Continuing care retirement communities (CCRCs), or life plan communities, provide older adults with the full spectrum of lifestyle and healthcare options - from independent living to assisted living to skilled nursing care - all on one campus.
Many retirees prefer CCRCs as a senior housing option since they can move into independent living when they are self-sufficient and do not need to relocate to a new living facility when their needs change. The CCRC contract types can vary, with some providing a guarantee of healthcare services to residents without a price increase, while others provide healthcare services a la carte or "fee for service."
Costs: Senior Living Facilities
Independent Living Communities
Residents typically find that independent living costs range from $1,500 to $4,000 a month. For example, in 2023 in Illinois, the average cost was $2,775, which was an increase of 9.5% from 2022, which was similar to the average cost in neighboring states (Wisconsin - $2,760; Michigan - $2,515; Indiana - $2,355).
This cost generally covers rent, utilities, maintenance, and access to community amenities such as social activities, dining services, and fitness centers. As is the case with the other living arrangements, the variety of services and the community’s location will play a significant role in the final cost of senior independent living.
Assisted Living Facilities
The fee structure for assisted living communities will also vary based on the level of care and services provided. Monthly costs typically start in a range from $3,000 and $5,000, with additional monthly fees for services beyond the basic package, such as for specialized medical care or memory care.
The average monthly national cost for a private one-bedroom assisting living arrangement was $5,350 in 2023. Whether you are considering staying in your current state or are looking to relocate, understanding the different available community options in your area and the extra costs associated with those options is very important for budgeting purposes.
In the Chicago area, the monthly average cost for an assisted living facility last year was $6,500, compared to, for example, Scottsdale, Arizona ($5,500), Ft. Myers, Florida ($5,675) and San Diego, California ($7,250).
Skilled Nursing Communities
The cost of skilled nursing care also varies significantly across different states, reflecting regional economic conditions, the quality of the nursing home community, and the level of care provided.
According to Genworth, the national average monthly cost in 2023 was $8,669 for a semi-private room and $9,733 for a private room. In states like New York and California where the cost of living is higher, the monthly costs are unsurprisingly higher ($14,813 and $13,231 for a private room on average, respectively, in 2023).
Conversely, states with a lower cost of living, such as Arkansas or Mississippi, offered skilled nursing care at a more affordable rate ($7,908 and $8,760, respectively, on average for a private room in 2023).
In Illinois, the average monthly cost for both a semi-private and private room in 2023 was below the national average ($7,452 and $8,669).
Continuing Care Retirement Communities
Continuing Care Retirement Communities (CCRCs) require an entrance fee, which typically will range between $100,000 to $1 million, along with a monthly fee.
The entrance fee, or buy-in, is a cost that will include unlimited access to a continuum of care services (i.e. residents will have access to a higher level of care beyond independent living) with little or no increase in the residents’ monthly fees. This fee will also vary based on the apartment size, the care options, and the return option.
The return option is a feature where a portion of the entrance fee is refunded back to the resident or their estate if the resident decides to leave the community for whatever reason. The refund feature is typically 0% to 90% of the entrance fee. Choosing a lower return option typically will mean a lower upfront entrance fee and vice versa.
The ongoing monthly fee will typically cover services and amenities such as dining, lifestyle and fitness activities, utilities building maintenance, and long-term care. It can also include concierge and transportation, housekeeping, valet and parking, and other ancillary services. Based on the level of services that the CCRC offers, the average monthly fee will generally range between $3,000 and $5,000.
A huge selling point for CCRCs is that they offer the convenience and flexibility of moving between various levels of care if needed, making them a comprehensive, albeit initially costlier, option. Comparing the higher upfront costs of the CCRC against other senior living options requires a careful evaluation of your short and longer-term needs in conjunction with your financial picture.
Which Senior Living Arrangement is Best for You or Your Loved One?
Everyone’s situation is different and there is no right or wrong answer when it comes to senior living options. Selecting the right senior living community requires careful thought and investigation.
Here are some tips to consider that may help you in your search:
Start your search early
This will provide you with a better opportunity to have sufficient time to research all the available options so that you can find a community that is a good fit for you.
Make a list of priorities
Write down a list in order of priority of the various features, amenities, and services that are important to you.
Tour the facilities, either in-person or virtually
If you can arrange it, try to visit the facility for an event or a meal or even better, for an overnight stay. This might enable you to get a better understanding of the overall culture and social aspects of a community and learn if it is a comfortable environment for you.
Similar to buying a home, carefully review the property, the floor plan of an apartment, and the various essential and leisure amenities.
Interview the management team and get all your questions answered
Besides addressing your list of priorities and related questions with management, make sure to learn about the staff’s qualifications and whether any recent resident satisfaction surveys are available for you to review.
Also, inquire with management how they adapt to the changing care needs of their residents and whether they have a process of developing personalized care plans.
Finally, get a thorough understanding of the financial aspects of the senior living facility arrangement, such as whether there are any potential increases in monthly fees and any additional costs for services beyond the basic package they offer.
Summary
Navigating the various senior living arrangements to find your next home takes time and research. It is important to not only learn about the list of amenities and services that different providers offer but in conjunction with that, assess both current and future needs and closely examine the contracts and fees that each community offers.
A well-informed decision, grounded in careful research and thoughtful consideration, will lay the foundation for a fulfilling and secure living experience during the senior years.
The Advanced Planning and Advisory team at Clearwater Capital Partners provides comprehensive retirement planning, which includes addressing cash flow issues such as the various costs involved with senior living arrangements and the effects, they have on one’s financial plan.
If you or a family member is looking for such financial planning assistance, please reach out to us with any questions you may have.
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