For many adults, independent living offers a maintenance-free lifestyle and convenient amenities that are too good to resist. Independent living communities come in a variety of shapes and sizes, offering everything from single-family homes to villas to apartments for residents who live there. Perhaps that is one of the draws to independent living communities: Each one is just as unique as the people who live there.
Just as they vary in floor plans and amenities, independent living communities can also vary in cost. Fortunately, many independent living communities are quite affordable, and adults find that their retirement budget is well suited for the fees that cover the all-inclusive lifestyle. As you begin to plan for your next steps, here are a few things to keep in mind while you weigh your housing options.
More so than other types of senior living options, independent living communities typically offer different payment options. The most common types of communities are ones that charge a substantial entrance fee, sometimes referred to as a “buy-in” fee, and ones that bill residents monthly.
The majority of independent living communities bill residents on a month-to-month basis. The monthly fee covers much more than rent for the residence. It also covers utilities, access to amenities on campus, and other services. Residents of independent living communities enjoy maintenance-free living with perks that can include an on-site fitness center, swimming pool, walking trails, regular housekeeping visits, flexible dining plans and security services. All of these amenities and services are included in the community’s monthly fee.
Continuing care retirement communities (CCRCs) often require new residents to “buy in” to the community by paying an entrance fee. This initial fee is typically quite large and is similar to real estate prices for homes in the area. Entrance fees vary by area but can range from $100,000 to $1,000,000, with the national average hovering around $300,000.
This initial fee goes to support the community. The fee also ensures that there will be a place on campus for residents to receive more care (such as assisted living, memory support, or skilled nursing services) should they ever need it. In many cases, the entrance fee is at least partially refundable to the person’s estate.
Communities that charge entrance fees also charge residents monthly fees that cover their living space, utilities, and access to other amenities and services on campus.
Every independent living community is unique, which means not all of them have the same monthly fee. The national average for monthly fees hovers around $3,000, but fees can vary greatly from state to state and region to region; monthly fees across the country can be anywhere from $1,500 to $10,000.
Factors that can increase or decrease the monthly fee of an independent living community include:
Just like any real estate purchase, costs of living and prices can vary from state to state and region to region. For example, a community in a bustling city named one of the best places to retire might cost more than a community in a smaller, more rural town.
The type of independent living community might also affect the cost. For example, a CCRC will often charge that large entrance fee on top of a monthly fee, whereas a more traditional independent living community will only charge a month-to-month rate.
You have your choice of floor plans at an independent living community, and a larger square footage will likely cost more. Similarly, an attached garage, patio, or other features could also increase the price of a residence.
Independent living communities often offer flexible dining plans to residents, which is one of the perks of living there. However, not all residents want to rely on the community restaurant for every meal. A dining plan that includes fewer meals per month will cost less than a more comprehensive selection.
Communities might charge different prices based on the type and number of amenities offered. For example, a community with a saltwater pool and fitness center might cost more each month than a community without these features.
Finally, costs might vary from community to community based on access to other care options on campus. Examples of additional care options include physical therapy and personal wellness classes.
As you begin to research independent living communities near you, be sure you find out what is—and isn’t—covered in the fees associated with your community choices. For example, if you plan on bringing your car to the community, make sure you don’t have to pay extra for covered or priority parking.
Other types of services that might drive up cost and not be included in a monthly fee could include:
If you still aren’t sure how senior living could fit into your current budget, take time to write down all of the monthly bills you currently have in your home. Don’t forget to add in costs associated with grocery shopping, dining out, entertainment, or gym memberships, because these costs will decrease or be eliminated completely in independent living. Then, compare this cost with a monthly fee estimate from communities near you.
While independent living fees are not covered by Medicare, you might be able to find other ways to offset the costs. First, talk to the independent living community about any deals they may be able to offer you. For example, you might get a month free if you sign a lease by a certain date, or you might be eligible for a discounted rate if you commit by the end of the year.
Next, see if there is any room for negotiation on the monthly fee. It never hurts to ask.
You might be able to strike a deal that offsets the cost of selling your current home as well. Sometimes, independent living communities will cover some closing costs or other real estate fees to expedite the sale of your current home if you commit to their community.
If you are eligible for Veterans Aid and Attendance benefits, you might be able to use those to offset the monthly cost of independent living. Though these benefits are typically for those living in assisted living or receiving homebound services, there are instances when independent living can be covered.
You should also research your life insurance policy. Some policies allow holders to cash out some or all of their benefits, which can then be used toward monthly fees.
If independent living is in your future plans, it’s wise to begin thinking about how that fits into your retirement goals. Make an appointment with your financial advisor to begin speaking candidly about how you can make independent living a priority.
Get even more information about the costs associated with independent living by downloading our free resource The Insider’s Guide to Understanding Independent Living Pricing. You’ll discover more detail about what fees cover, as well as what to look for when making a smart investment.
This post was originally published in January 2022 and updated in February 2023.