 Personal Finance PowerPoint Presentation. Retirement Communities Overview. Prepare to get financially fit by practicing personal finance. Insurance is part of our long-term risk mitigation strategy where we follow the adage of measure twice, cut once, putting a formal process in place, something like setting the insurance goals, developing a plan to reach them, put the plan in action, review the results, and repeat periodically. Most of this information can be found at Investopedia. How retirement communities work, which you can find online. Take a look at the references. Resources continue your research from there. This is by Amy Fontenille, updated September 19, 2021. In prior presentations, we've been talking about different types of insurance. We then moved on to the medical insurance, and then we talked about long-term care, and now we're going to be discussing the retirement communities in conjunction with those discussions, which you can take a look at for more reference. So choosing a retirement community is a big decision. Your choice will affect your and your loved one's finances, quality of life, and in many cases, health and longevity. Here's an overview of the four main types of retirement communities, how they work, and their approximate cost. We first have the independent living, also called senior apartments, or 55-plus communities. Independent living facilities are for older people who don't need any special medical care or assistance with daily activities. So these are people who are fairly self-sufficient within the independent living. They consist of private apartments that usually include a kitchen or a kitchenette, and common sizes ranging from studios to two bedrooms. Rent can range from 1,500 to 3,500 a month according to the senior living website, a placeformom.com, which is a catchy website that you can check out. But what about dad? Where's dad in this equation? In any case, rent depends on apartment size, geographic region, and amenities. Some independent living communities also have a high buy-in fee. Others have a small entrance fee of perhaps $750 to $1,500, and still others have no buy-in or entrance fees at all. Some independent living facilities include utilities, meals, housekeeping, basic maintenance, and scheduled transportation for errands and doctor visits to the monthly rent while others assess these charges separately. So you're going to have to do some homework in terms of what would be included, what would not be included in the different areas. So overall, the cost can be similar to what you pay if you continue to live at home, but independent living communities offer a maintenance-free lifestyle and potentially greater opportunities to socialize. Assisted living communities are for people who don't need the high level of care provided by a nursing home, or some assistance with activities of daily living. So as the name implies, assisted living is going to have some assistance involved, but not to the level of the nursing home. So assistance might include help getting dressed and bathing and toileting, as well as medication reminders. Assisted living can also be appropriate for patients with early-stage memory loss, dementia, or Alzheimer's who need extra help, supervision, and security. The average monthly assisted living rate for a private room, board, housekeeping, and some personal assistance was $4,300 per month in 2020, according to the report on long-term care by Genworth. Genworth estimates that by 2029, the cost will raise to $5,611 a month. That's quite specific for being able to predict out to 2029. But in any case, the cost of assisted living can vary depending on where you live, but the cost per month in Washington, D.C., for example, is much higher, $6,000 than the national average. An assisted living facility in Arkansas is much less, costing an average of $3,500 a month, according to Genworth. Nursing homes. Living in a nursing home is for individuals who need extensive medical care and is the next closest thing to hospital care. So this is obviously leveling up from the assisted living to the nursing home. Nursing homes also help with activities of daily living, such as eating, dressing, getting around, and bathing. Some nursing homes are set up to feel more like residences, while others feel more like hospitals. The annual cost of a private room in a nursing home room averaged $105,850 in 2020, which is obviously quite expensive, which is why this kind of fits into some of our discussions with relation to insurance. So that's according to Genworth's survey with a semi-annual private room coming in not far behind at $93,075. Because nursing homes are so expensive, it's a good idea to consider purchasing long-term care insurance well before you might need it. So obviously, these costs are quite high, so that's where the consideration for the long-term care that we talked about in prior presentations comes into the discussion. So it isn't always possible to get into the nursing home you want when you need it. Many have waiting lists. Some do not accept Medicaid patients. Also, some facilities are only open to certain categories of patients, such as patients who require acute care. Some nursing homes may expose residents to the risk of elder abuse and other problems. Continuing care, continuing care retirement communities specialize in providing a long-term home for older people. Residents can stay in independent living as long as they're self-sufficient. So they have the option to transition into assisted living and nursing care if needed without having to relocate to a new facility, which can be obviously useful. Continuing care facilities are the most expensive type of retirement community according to the AARP. Interest fees can range from $329,000 to $1,000,000. Monthly fees on top of that range from $3,000 to $6,000 or more depending on housing type, care level, and other choices. The cost also depends on the type of contract the resident opts for. A life care contract, also called an unlimited contract, is the most expensive upfront but locks in a long-term price. So clearly if you're saying I'm going to do this for the life span, then you'll be locked in. You don't have that kind of end date which you can say, okay, time's up and we're going to kick you out of here type of thing, which obviously wouldn't be a good situation. So a modified contract covers specific services for a certain term and the price can go up at the end of that term. A fee-for-service contract can be thought of as a pay-as-you-go plan. While it requires no commitment, you will always pay the current market price. So what's the bottom line? Along with the considerations above, it's important to evaluate the financial stability of any facility you're considering, especially if it has a large upfront fee. You should also check with the facility's complaint history before committing to a community see whether you can arrange a short-term stay perhaps two nights to get a sense of what it's like to live there.