Weighing the Costs and Benefits of a Retirement Community
Consider all the fees and amenities before moving
There are many different types of retirement communities. Places such as nursing homes and assisted living homes often offer a high level of care, while options such as 55-plus and active-adult communities typically cater to seniors with more mobility and independence. No matter what type of retirement community you choose, however, it's important to weigh all the financial pros and cons.
BestStatesToRetire.com suggests a few points to consider:
- Entry fees. Many communities charge a sizable initial entry fee that must be paid in order to move in.
- Maintenance. When your toilet leaks or garage door breaks, there's usually someone at the community who will fix it for you. And because repairs are usually included in your monthly payment, this can save you a lot of cash (and stress) in the long run.
- Activities. Are swimming pools, tennis courts, game nights, BBQs and fitness centers important to you? Be prepared to pay more for communities that provide plenty of fun amenities.
- Medical care. If you require continuing care, it may be financially smart to find a community that offers comprehensive medical assistance so you don't have to go to the doctor every time you need something checked, such as your blood pressure, or administered, such as medication.
SmartMoney.com's Bill Bischoff notes that there is a tax deduction for Continuing Care Retirement Communities (CCRCs). He explains, "A percentage of these [CCRC] costs count as medical expenses for tax purposes, even if the resident currently lives independently and requires little or no medical care. Taxpayers can only write off medical expenses to the extent they exceed 7.5% of adjusted gross income, but because CCRC fees often amount to big dollars, significant write-offs are often available. Meaningful tax deductions are especially likely in the initial year when the entry fee is paid."
Living in a community where you don't have to pay separate bills for things like cooking, cleaning, transportation and entertainment can help simplify your financial life. For some people, however, it makes more sense to live completely independently or with family. If you have questions about whether you or a loved one can afford the services of a retirement community or similar facility, give us a call today and we'll help you take a look at your financial future.