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Understanding the Costs of Life Plan Retirement Communities

Senior couple counting funds on calculator, at home using laptop.

Whether you’re just starting to think about retirement living options or you have actively begun to visit different retirement communities, we know your first question is  “How much will it cost?” We understand! You want to know “What will I pay?” “What can I afford?” “What will I get in return?”

We’re here to provide a clear explanation of the various costs inherent in moving to a Life Plan Community, what a Life Plan Community does not pay for, and what financial benefits you may receive, including refundability options.

A Simple Explanation of Levels of Care

Before understanding costs, it’s critical to know what the “levels of care” are that retirement communities offer. Levels of care generally include:

  • Independent Living
  • Assisted Living
  • Memory Care
  • Skilled Nursing Care
  • Short-term Rehab
  • Respite Care

Whereas some retirement communities may only offer one or two levels of care, Life Plan Communities like The Moorings of Arlington Heights offer a full continuum of care. That means that several levels of care are offered on one campus. Your current and future needs are met in one community, allowing you to enjoy each day with fewer worries.

The Entrance Fee

In a Life Plan Community, residents will pay a one-time entrance fee and a monthly fee.

The entrance fee locks in your choice of residence and ensures access to the full continuum of health care services the community offers.

Depending on your specific contract, the entrance fee may be partially or fully refundable, meaning that some or all of the entrance fee will be returned to you or your successors when you leave or pass on. 

Entrance fees for senior living communities vary greatly; in Chicagoland, for example, entrance fees can run anywhere from $100,000 to over $1,000,000.  

The amount of your entrance fee depends on the location of the community and the size of the residence you’ve chosen. Entrance fees may also provide a certain amount of coverage toward your future health care.

The Monthly Fee

The monthly fee in a Life Plan Community covers the cost of utilities and all the services and amenities offered to residents, from housekeeping and groundskeeping, to meal plans and fitness centers. Fees can vary but usually range between $3,000 and $7,000 per month in the Chicago area.

Monthly fees are driven by the type of residence you’ve chosen, the contract you’ve signed, and the amenities that are available. The monthly fee also covers access to the continuum of health care.

In most cases, the monthly fee in a Life Plan Community compares favorably to the monthly expenses of living in one’s present home – especially when you factor in homeowners insurance, utility bills, property taxes, home and lawn maintenance – in short, all the headaches of homeownership.

Our sales and marketing counselor will gladly walk you through a side-by-side comparison of monthly expenses at home versus in a Life Plan Community to help you make an informed decision.

It’s important to note that monthly fees often increase along with inflation. According to a recent Kiplinger report, monthly fees generally increase 4%-6% annually within independent living residences in a Life Plan Community.

Senior Living Agreements Offered at The Moorings of Arlington Heights

Type A

A Type A contract – also known as a LifeCare contract – promises to deliver increased levels of care with little or no increase in monthly service fees resulting from the move to higher care levels.. Residents pay an upfront entrance fee, which essentially prepays for future care if it should be needed.

While you pay more initially, your monthly fees are predictable and will remain predictable the same even if you need additional care, which can give you substantial savings in the long run.

Be sure to ask our sales and marketing counselor to walk you through the details of our partially refundable entrance fees, where 50% or 90% of the fee is refunded to you or your estate.

Type B

A Type B contract, also known as a Modified Agreement, typically has a lower entrance fee and provides health care services as needed. While health care costs may be lower than you’d pay outside the community, your monthly fees will increase if you require health care.

Not all Type B contracts are the same:

  • You may receive a limited number of free days in skilled nursing, with additional care billed at daily market rates.
  • Care may be billed at a minimally discounted rate.

What Life Plan Communities Do NOT Cover

Supplemental insurances may include Medicare, veterans benefits, and long-term care insurance.

Our sales and marketing counselor will help you understand what your existing health insurance plans and any supplemental insurances will cover.

The following health care services are generally not covered by most retirement communities:

  • Doctor visits
  • Diagnostic testing
  • X-rays
  • Medical equipment
  • Medications
  • Mental health services

Tax Advantages of Life Plan Retirement Communities

 While tax laws are constantly evolving and are always subject to interpretation, current IRS guidelines allow residents of Life Plan Communities to deduct the portion of their fees that pertains to health care. We encourage you to consult with your tax advisor for additional information.

The Value of Choosing the Right Retirement Community

When considering a move to a senior living community, it’s important to understand not just affordability, but also value.

Many residents of Life Plan Communities find that the true value of choosing the right community  includes:

  • Knowing they have a secure plan in place for their future
  • Being loved, cared for, and respected among like-minded friends and acquaintances
  • Living a healthier lifestyle
  • Giving family and friends peace of mind
  • Staying close to their spouse if physical or cognitive changes occur
  • Feeling and being safe
  • Having unlimited choices of social, spiritual, intellectual and physical pursuits

Discover the Unsurpassed Value of Senior Living at The Moorings of Arlington Heights.

 At The Moorings of Arlington Heights, residents live each day with peace and joy knowing their needs are met at a cost that fits their budget. Learn more about our Life Plan Community and all that it has to help you live your best life. To speak with one of our knowledgeable sales and marketing counselors, call us today at 847-956-4304.