Entry Fees: 

In a CCRC (Continuing Care Retirement Community), entering as an Independent Resident, the Entry Fee is based on the size of the dwelling accommodation you chose to live in.  A three bedroom townhouse will be a lot more expensive than a studio apartment.  My Mom lives in a studio apartment.  So, the Entry Fees we saw were from $3500, for an Assisted Living (AL) & Nursing Care Facility (NC) to $92,000 in a CCRC.  Why such a big range in price?  Many reasons, including the size of the long term care facility, the size of the dwellings, the amount of amenities included in the basic monthly fee and, most importantly, the cost and quality of the long term care.  The two facilities we saw that had the largest Entry Fees, also had discounted monthly fees for assisted living costs and skilled nursing care costs for qualified residents, should they need them in the future.  Both had discounts that were substantial.  The question is how many years in skilled nursing care, and/or assisted living, will you require over the remainder of your life? 

These are not easy questions to raise, or to answer.  But maybe this will help.  Under The National Vital Statistics Reports, Volume 54, Number 14, April 19, 2006, United States Life Tables, 2003, by Elizabeth Arias, Ph.D., Division of Vital Statistics, revised March 28, 2007, you will find Tables 1 – 9 very interesting.  I’m sure there are other sources of information, but this source will give you a good idea of your life expectancy.  For Example, on Table 6, my 81 year old mother has a life expectancy of 8.9 years.  Remember, this is an average.  But, essentially, we needed to plan ahead for 9 years, at least.  In the same table, a white woman (there are tables broken down by race and gender) who is past 71 has a life expectancy of 15.2 years, on average.  Now let’s take a minute to think about this.  At this very second, we are saying that the average 71 year old woman will live to 86.2 years, while the average 81 year old woman will live to 89.9 years.  Does that sound funny to you?  Here is the link.    http://www.cdc.gov/nchs/data/nvsr/nvsr54/nvsr54_14.pdf    The 71 year old is younger, yet she will live a shorter life, on average, than an 81 year old, as calculated when the tables were made.  Why is that?  It’s simple, actually.  The longer you live, the better your chances of living longer.  

*Of the Entry Fees I saw that were $10,000 and up, the facilities AMORTIZED them over a period time, usually 50 months.  To amortize something is to gradually, over time reduce, or pay down, its value.  How does this effect you?  Well, if you paid a $10,000 Entry Fee, stayed at the facility for 24 months and for whatever reason decided to leave, according to the contract, you may be entitled to a refund of a portion of the Entry Fee.  If the facility amortizes the Entry Fee over a period of 50 months, that means they ‘take’ 2% (50 months times 2% equals 100%) of the Entry Fee every month.  If you stayed 24 months, the Entry Fee would be amortized 48%.  According to the contract, if all your bills are paid you should receive $5200 ($10,000 - 48% ($4800) equals $5200) after you leave in good standing.  Others costs associated with termination should be spelled out in the contract.  Of course, if you leave after 50 months, there is nothing left to refund.  The contract, if it has an amortization rate, will tell you the rate.  A particular facility may have a different amortization rate than 2%.  Whatever it is (48 months, instead of 50 months, would be 2.08333%) fill that rate in.  If the facility has an Entry Fee but does not amortize it, fill in 100%.

Monthly Fees: 

We have briefly touched on the different levels of care.  At this point we need to look a bit closer.  At a CCRC, usually, a person would apply to become an Independent Resident.  From being Independent, when a resident can no longer live independently, they progress to what is called Assisted Living.  Depending on the facility, there can be many levels of assisted living.  If the resident requires more intensive care than assisted living can provide, they can receive skilled Nursing Care, if available.  

Click here for an explanation of Levels of Care.

Remember, this spreadsheet attempts to approximate the costs you have in the present. As to the future, we have no crystal ball. Yet, we can play with the numbers and see how costs may turn out based on particular scenarios. So even if you can live independently, you must fill-in the sections for assisted living and skilled nursing care. Then we will be able to project into the future.

The Basic Monthly Fee should be based on the size of the dwelling, or accommodation, you have chosen. Fill in the amount for the accommodation you have chosen. Independent Living may have a monthly property tax fee. If a facility has only one assisted living level, use that basic monthly cost for all three levels on our spreadsheet. For Nursing Care, choose the accommodation you prefer (semi-private or private) with the highest level of skilled nursing care offered.

Let’s continue and see how things shape up.