[Originally posted Feb 2016. Updated May 2021]. In a recent post, I described the various types of independent living senior housing providers and ways to distinguish one from another. In this article I address a common question: What is the cost of senior living?
According to the National Investment Center for Seniors Housing and Care (NIC), there are roughly 4,060 retirement communities in the United States classified as majority independent living. These communities are characterized by having most residents who live fully or mostly independently and do not require daily assistance or skilled care.
About half of majority independent living communities are rental communities, while the other half require an entry fee or purchase, which is common among continuing care retirement communities (CCRCs), also known as life plan communities. (Update: The year-end 2019 NIC guide (sixth edition) reports the total number of independent living communities and CCRCs as 5,253.)
Monthly cost of senior living can vary dramatically
NIC’s 2014 Investment Guide reported an average monthly cost of $2,765 for majority independent living communities, though actual prices can range from a few hundred dollars a month to $9,000 or more for ultra-high-end communities. (Update: The year-end 2019 NIC guide separates independent living and CCRC costs, showing average monthly rents of $3,239 and $3,353 respectively.)
Costs vary mainly based on four factors: breadth of services, amenities, residence size, and location. A community offering limited activities will cost less than one that provides transportation, an on-site wellness center, a pool, medical access, and concierge services. Location matters too: a retirement community in a major metropolitan area will usually charge substantially more than a similar community in a rural region.
À la carte or all-inclusive?
Another important consideration is how fees are structured. Some providers publish a base rate and charge extra for services or amenities, while others include most offerings in a single all-inclusive monthly fee. When comparing options, verify what the base fee covers and which services incur additional charges.
Entry fee retirement communities
Many CCRCs fall under the majority independent living category and provide a continuum of care at one location: independent living plus priority access to assisted living, memory care, and 24-hour skilled nursing as needed. The goal of a life plan community is to allow residents to stay in the same overall community as their care needs change, moving only to the appropriate on-site care setting.
In exchange for housing, services, and contractual priority access to higher levels of care, most CCRCs charge an entry fee in addition to monthly service fees. The average entry fee is around $300,000, though this varies widely depending on services, amenities, residence size, and location, as well as the type of residency contract offered.
>> Learn more about CCRC residency contracts
Some CCRCs do not require an entry fee; instead they operate as rental communities. All else equal, monthly fees at rental CCRCs tend to be higher than at comparable entry-fee communities because the upfront payment is replaced by higher ongoing charges.