The Cost of Retirement and Life Plan Communities

Published by Uncommon Marketing Works at April 12, 2023

A Retirement Community Entrance Fee is an investment in your future!

Most Life Plan Communities operate with a financial plan that includes a one-time entrance fee and an ongoing monthly maintenance or service fee for each household. The entrance fee is typically not considered a healthcare expense, nor is it a real estate purchase; rather, it is a lump sum payment that gains the resident access to their new Apartment, Cottage, Villa or Carriage Home, as well as subsidizing the amenities and services provided by the community. In many cases, your entrance fee also includes sizable renovations to the Cottage, Villa, or Carriage home that you will be moving into – so as a value added item – consider that new kitchen and bathroom as icing on the cake!

There are four different Life Plan Communities contract types:

Type A – Life Care Contract – Similar to a long-term care insurance policy, this contract type includes the full continuum of care at a consistent cost.

Pro: In a Life Care Contract, monthly costs are advertised to be consistent even if a higher level of care is needed – thus conserving resources if a higher level of care is needed.
Con: A Life Care Contract is likely a much higher price point in both the entrance and monthly fee. Also, statistically few individuals will actually need long-term skilled nursing care, meaning that estimated costs over the entire duration of someone’s residency are much higher than if they just paid for nursing care services in a fee-for-service contract. There may also be health related exclusions to the Life Care Contract and sizable second-person fees.

Type B – Modified Fee for Service – This contract type includes limited healthcare coverage in addition to the residential living and amenities.

Pro: At Homestead Village, fifteen days of skilled nursing care per resident, per year, are included with the residential contract and can be used in the case of temporary illness or injury. This benefit renews each year and can provide substantial savings over the duration of residency within the community.
Con: Once the healthcare benefit has been used up, then the resident must pay out of pocket for skilled nursing care services. Also, at Homestead Village, the Healthcare benefit likely only covers skilled nursing care – not personal care or home care – but the good news is that personal care and home care are services that can help residents thrive where they are to stay out of skilled nursing care longer.

Type C- Fee for Service – this contract type does not include continuing health care costs and the resident will incur increased costs as services such as personal care or skilled nursing care are needed.

Pro: You only pay for the services and care that you are receiving.
Con: If personal care or skilled nursing care is needed long term, the out of pocket expenses can become quite high. Most life plan communities employ a social worker who can help understand the costs of long term care, Medicare, Medicaid, and long term care insurance if needed.

Type D – Rental – Some Life Plan Communities offer a rental option, but be sure to research what services are included, and if any services are excluded – such as access to the full continuum of care. You may find the monthly fee is higher in a rental option.

Entrance Fee Refunds:

Most Life Plan Community Contracts include the option for a refundable portion of the entrance fee. So, rather than viewing the entrance fee transaction as purchase and resale, you would view it as an entrance fee and a refund. Refund plans may vary from community to community. Homestead Village offers a 0% refund and a 60% refund – both of which amortize over a specific period of time so that if a resident departs sooner than expected, a calculated amount is refundable based on how long the resident lived within the community.

What refund plan is best? It is really up to each individual resident – but here are some thoughts to consider when selecting a refund plan:

Do you want to leave money to an estate? A larger refund plan will guarantee* (assuming charitable care funds are not used) a set amount of money will be issued to your beneficiaries, estate, or charity of choice.
When you do the math, a higher refund plan gives you more value. Essentially, with a larger refund plan, the value of the services received surpasses that of the non-refundable portion of the entrance fee.For example, if you paid a $400,000 entrance fee, but your estate received a 60% refund – you essentially lived at the Life Plan Community for only $160,000.
Would you rather leave money in the stock market? A lower refund plan is typically a smaller entrance fee price.
Do you have beneficiaries? If not then a lower (0% refund plan, for example) keeps more cash in your pocket up front.
Are you not sure that you’re staying local? If you’re not certain that you want to remain in a certain geographic area – be sure to crunch the numbers before paying an entrance fee to a community. The longer you live at the life plan community – the better value the entrance fee becomes.

We recommend talking with your financial advisor about which refund plan makes the most sense for you. A sales counselor at the Life Plan Community can also explain the nuances of their specific refund plans.

Does a Life Plan Community take over your assets? (Hint: NO!)

The misnomer that a retirement community will take over your assets, or “take all your money” is a fear that many people still verbalize. Reputable non-profit Life Plan Communities operate with sound business practices that include providing transparent billing practices, clearly outlining costs, and giving sample contracts and disclosure statements to all prospective and incoming residents. The incoming resident should know exactly what their costs will be, and will pay for their services through monthly billing statements. At no time would Homestead Village take over management of anyone’s assets or accounts, including real estate.

If in the rare occasion that someone would exhaust their financial resources, most non-profit Life Plan Communities commit to continuing to serve their residents regardless of cost through benevolent care funds and endowments. If you are exploring a community lifestyle, be sure to inquire about charitable care and access to the continuum of care if finances become limited.

Compare Retirement Community Monthly Fees to your regular monthly expenses!

We recommend comparing your current monthly expenses to your estimated monthly fees in a Life Plan Community. You may be surprised to see that you may actually spend less each month at a Life Plan Community.

Budget items to compare may include current or future expenses such as:

Save on Taxes: Real estate taxes are eliminated when you move to an LPC since you don’t own the property(Usually HUGE savings for LPC residents!)
Save on Home Maintenance: You’ll never have to pay to replace another roof, hot water heater, appliance, or any other home maintenance related costs
Save on Insurance costs: Renters insurance is required, but is usually a big savings compared to homeowners insurance.
Save on grocery costs: Flexible dining plans allow you to enjoy great meals at campus restaurants – even if you still enjoy cooking at home most of the time.
Compare your utility costs: Depending on which Life Plan Community you chose, utilities may or may not be included in your monthly fees. At Homestead Village, utilities are bundled into the apartment monthly fees, but in the Cottages, Villas, and Carriage Homes are intentionally billed separately through the providers so residents can dictate their usage and costs. This is especially nice for residents who summer or winter in other areas such as Florida or the mountains.
Compare Activities & Memberships: Are you a member of a gym? Do you pay to play pickleball or tennis at a club? Do you enjoy bus trips, excursions, or continuing education programming? A Life Plan Community offers all of these services and more through their life enrichment calendars.

Emergency services and healthcare: If there is an emergency, who would you call? Homestead Village provides residents with peace of mind knowing that qualified and caring staff are available 24/7 to respond in case of an emergency. An emergency call pendant program and daily check in program are also available free of charge.

The Value Life Plan Communities in Lancaster, PA Bring

There are 13,000 individuals residing in retirement communities in Lancaster County, PA. Life Plan Communities are a popular choice for many reasons, and have only grown more popular over the years. In fact, most life plan communities in Lancaster, PA maintain full occupancy and operate with wait lists for future residency.

So why the interest?

Retirement communities provide invaluable benefits for the cost of retirement. When it comes to a top-performing Life Plan Community, like Homestead Village, intangible value is derived from:

Looking out the window on a snowy day and seeing the landscaping team shoveling your driveway, sidewalk, and putting salt down
Being able to call maintenance if there is any issue or concern with a household appliance, a light bulb burns out, or any maintenance-related need arises.
Knowing that a nurse, social worker, and chaplain are available to provide support, discuss medications, or be there in time of need
Providing peace of mind for you and your family that help is just a call away if needed. Or, if there is an injury or illness that a team of caring individuals can help secure services
Allowing your family, friends and neighbors to remain family friends and neighbors – rather than caregivers. Our team is here to lift the burden and provide services such as lawn care, snow removal, transportation, companionship, and opportunities to live a fulfilling lifestyle. Personal care, rehabilitation, memory support, and skilled nursing care are also available if needed. Click here to read more about how a Life Plan Community can take the responsibility of care.
Providing meaningful ways to remain active, engaged, and connected with others who are in a similar phase of life.
Providing convenient access to wellness opportunities through classes, programming, and events in the fitness center, therapy pool, or pickleball courts.
Providing delicious world-class dining options to residents to enjoy well-balanced meals while also increasing social opportunities
And more!

Living in a retirement community enhances your freedom and ability to lead a fulfilling life, and, like Homestead Village’s motto states, “Thrive Where You Are.”

The Best CCRC in PA for the Retirement Community Cost

Homestead Village prides itself on being an all-encompassing space for our residents. Live, play, volunteer, and THRIVE, here at Homestead. We present opportunities to give back to communities through activities such as crafting, woodworking, and on-campus hosted events. The cost of retirement is well worth the opportunities our life plan community provides. Check out the costs of our newest campus extension project—the luxury Townstead Apartments—and what’s included in that cost by visiting our Townstead page.

What Life Plan Community Services Provide the Most Value for the Cost of Retirement?

Every life plan community is different in what they offer to residents. Some retirement communities are more focused on the medical aspect of care and others are more lifestyle-oriented. However, every Life Plan Community should offer a wide range of services meant for resident care and growth in some capacity. The retirement community costs are based on a balanced budget that is derived from the average cost per resident to provide the care and services. Homestead Village has a minimum of four residents on the active, voting board of directors to help lead decision making about the annual budget and costs that may directly affect resident fees.

How do you determine whether the retirement community cost offered is worth it? As discussed before, Life Plan Community can seem expensive up front, so it’s important to consider all aspects and ensure amenities you enjoy are included in the price point, and evaluate the alternative – which is living in your home as your needs evolve into the future. Our recommendation is to consider the most important amenities to your lifestyle when looking at life plan communities in Lancaster, PA.

Are there numerous ways to get involved and social opportunities to participate in?
Do they offer transportation to shopping centers or doctor visits?
What is covered in your maintenance plan?
What level of medical care do you receive?
Do they provide volunteer events?
What do their dining options look like?
Do they have the most up-to-date residences and floor plans to fit your lifestyle?
Are the staff friendly and welcoming?
How is campus security?
How do the current residents feel about the life plan community?
Do you feel like the community and staff are crafted around your needs and support level?

Homestead Village incorporates all of these factors into our programming to provide the highest quality services in Lancaster PA.

Make the Decision for Yourself: Evaluate the Cost of Retirement in a Life Plan Community and be pleasantly surprised!

Your personal situation determines whether you would like to invest in a life plan community. How much can you afford, and what do you want out of your retirement community? Once our residents moved to Homestead Village, they commented that they wished they had done it sooner and didn’t put off the decision as long as they did.

Exploring nearby life plan communities can help you discover exciting new opportunities and options for your future. viewing online resident walk-throughs, and scheduling campus tours are your best ways to get the feel for a community before you consider investing.

You can schedule a tour with Homestead Village today. Experience the premier life plan community in Lancaster, PA. We offer beautiful homes, independent living, professional healthcare services, and a plethora of activities and volunteer opportunities. Determine whether our retirement community cost is right for you by walking through our beautiful campus and experiencing our uncompromising level of care. Schedule your on-campus tour of Homestead Village today.

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