Understanding Entrance Fees for Retirement Communities

Retirement communities provide seniors with a safe, maintenance-free environment where they can enjoy an active lifestyle. As you’re looking for the right retirement community, you’ll need to know the costs of the community.

One type of retirement community you might be interested in is a Continuing Care Retirement Community (CCRC), also known as a Life Plan Community. In Life Plan Communities, residents have access to a continuum of care if their health needs change.

If you join a CCRC, you will have peace of mind that all your health needs can be met in your community. You can receive higher levels of care like:

• Enhanced Living
• Skilled Nursing
• Memory Care
• Short-Term Rehab
• Adult Day Program
• Care Management
• Private Duty

An entrance fee is a common cost for these communities, but each community will be different based on the types of contracts they provide.

When you understand how entrance fees for retirement communities are calculated and what they cover, you can make a more informed decision if the community is right for you.

What Do Entrance Fees for Retirement Communities Cover?

Also called a “buy-in” in some communities, your entrance fee is paid upfront, securing your access to health care at the community. The cost of your entrance fee can depend on the type of contract you have with the community.

• LifeCare (Type A): While this will likely have the highest entrance fee, you are guaranteed access to the community’s health care services in the future and at a predictable rate. If your health care needs change, your monthly fee will not increase.
• Modified (Type B): This entrance fee is also higher than others, but the way you pay for health care services is slightly different than Type A. Depending on your contract, you may receive a discount for your health care costs, or there may be a set amount of days of free health care before paying a per diem rate.
• Fee-for-Service (Type C): With a typically lower entrance fee, you can get access to health care, but you will need to pay market rates at the time of service. These costs can be much higher than what you would pay with a Type A or B contract.
• Rental-Only: This doesn’t have an entrance fee, but you do pay monthly or yearly leases to live in the community.

Here at The Overlook, we offer two contract options. If you have questions about either option, please give us a call so we can explain what they entail and answer any and all of your questions. The two contract options are:

• Type A LifeCare Agreement
• Fee-for-Service Agreement

What Are Refundable Entrance Fees and Nonrefundable Entrance Fees?

You may see the phrase refundable or nonrefundable entrance fee. Those differences include:

• Refundable entrance fee: These may cost more upfront, but a percentage of the fee can be returned to the resident or their loved ones if the resident moves or leaves the community.
• Nonrefundable entrance fee: A nonrefundable entrance fee can be a lower cost. If a senior moves or passes away, the senior or their loved ones will not recover a percentage of the entrance fee.

Entrance Fee Tax Deductions

When it comes to tax deductions, you may be able to claim portions of entrance fees as tax-deductible because they could be considered prepaid medical expenses.

This tax break can apply to healthy residents because while they may not be using the higher levels of care available at the community, their entrance fee covers their costs of having access to it.

What Is a Monthly Fee?

The other financial aspect of Continuing Care Retirement Communities is the monthly fee. A monthly fee will be your recurring fee that covers daily community costs.

These costs are all the things you enjoy day in and day out in your community like your delicious dining options, support for resident special interest clubs, and maintenance keeping the community clean and beautiful.

At The Overlook, monthly costs can include:

• Residence types include one or two bedroom Apartment Homes, or stand-alone Cottage Homes
• Services and amenities like fitness classes, learning to paint, or growing flowers
• Activities and Events like joining a club or attending a lecture
• Maintenance
• Security
• Housekeeping
• Meals

Get Answers to Your Questions at The Overlook

At The Overlook, we understand how important it is for you to understand the process of moving into our community, including the financial costs. We can meet with you to look at floor plans and available residences to determine the best option for lifestyle and budget.

We’re also here to answer your questions about our services and amenities and the senior living options available at The Overlook. We’re happy to assist you in any way we can. Reach out to us today to book a tour and see the exciting, active lifestyle The Overlook offers.