Rental vs. Entrance Fee: What’s the Best Option for Senior Living?

When you don’t have to worry about being close to work or where your kids will go to school, you suddenly have the freedom to live wherever you want. If you’re like most retired adults, you’re probably exploring ways to trade in the responsibilities of homeownership for the freedom of a maintenance-free retirement community.

Two of the most popular options are a rental retirement community and a Life Plan Community that charges an entrance fee. When it comes to choosing between a Life Plan Community and a rental community, the biggest factor is whether or not you think you’ll need future care. Before you decide, consider that the U.S. Department of Health and Human Services reports that 70% of seniors 65 and older will need some type of long-term care with an average stay of approximately three years. And even if you don’t need care, what about your spouse?

This blog post will cover the important differences between rental vs. entrance fee senior living that you need to know.

Rental Retirement Community

A rental community is a good option if you’re able to live on your own, without the need for higher levels of care. But there’s more to consider than what you’d be paying today. Here’s some general information about rental communities:

• Fees: Residents sign a lease for an agreed-upon length of time — anywhere from month-to-month to a year. While there may not be an entrance fee, there will likely be a security deposit, which may or may not be refundable. Your monthly fee is determined by the size of your residence, the level of care you need, and the amenities you use.
• Lifestyle: A variety of services and amenities will be built into your monthly payments. While they will vary by community, these can include meals, housekeeping, maintenance, transportation, and on-site events and activities. In general, rental communities offer more a la carte services than Life Plan Communities. Be sure to review the rental agreement to see which services are included and which will cost extra.
• Care: Most communities provide independent living, but some may also offer higher levels of care, including assisted living services — either in your home or in a different area of the community — and memory care. However, for these higher levels of care, you may have to pay full market rates. If care isn’t available at the rental community, you’ll have to move to get the care you need.

Life Plan Community

A Life Plan Community is an ideal way to continue your active lifestyle because they combine independent living with access to a continuum of care usually provided on-site. That way you don’t have to worry about making a move during a health emergency. Other features include:

• Fees: Life Plan Communities require an initial entrance fee for their senior living plus a monthly fee. This contract structure offers tax advantages that can save you money over time. (Consult with your tax advisor.) The entrance fee secures lower rates for any future care you may need.
• Lifestyle: Your monthly fee typically covers the cost of utilities, housekeeping, maintenance, choice of meal plans, activities, programs, classes, on-site events, transportation, and the use of all community amenities.
• Care: With the upfront investment of an entrance fee, a buy-in option may look more expensive. However, the plan for lower-cost, predictably priced long-term care adds value and peace of mind that’s hard to put a price tag on.

Santa Marta: A Life Plan Community with Life Care

At Santa Marta, you get all the benefits of a Life Plan Community, combined with the financial predictability of Life Care. With our Life Care contract you have unlimited days of health services, if ever needed, including assisted living, memory care, skilled nursing, and rehabilitation, with only a slight increase in your monthly service fee.

Finding an Option That Fits Your Lifestyle

When you consider all the services and amenities available to you today and the security of having a plan for tomorrow, a senior living community may be more affordable than you think. To set up a personal tour to learn more about Santa Marta, contact one of our friendly senior living counselors.