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Entrance Fees: A Clear, Detailed Guide for Seniors

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If you’re considering your senior living options, you’ve probably noticed that some communities charge entrance fees and some don’t. While each tout their benefits, the one that’s best for you comes down to your needs today and tomorrow. Because while it’s easy to focus on the cost right now, there are important future advantages to take into consideration. 

Perhaps the biggest factor you need to weigh is whether you think you’ll need care in the future. Before you decide, consider this – 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. If you’ve researched the cost of care, you know it could easily be in the tens of thousands of dollars a year. 

What is a Senior Living Entrance Fee?

At a Life Plan Community that charges an entrance fee, like Freedom Village, what you pay is typically determined by the type of contract and the size of residence you choose. The more square footage, the more your entrance fee. It not only covers your residence but gives you access to any future care you may need.  

Your monthly service fee then covers the cost of the community’s services and amenities. At Freedom Village, that includes things like a fitness center, indoor heated pool, hot tub, arts and crafts studio, woodworking shop, scheduled transportation, housekeeping, 24/7 security and more. It also covers your meal plan and all interior and exterior maintenance and upkeep. With a Life Care contract, the monthly service fee you paid in independent living covers most of the cost of any future care, but it will go up a little to cover additional meals.  

The Advantages of an Entrance Fee

If you’ve paid off your house, you can usually afford to move to a Life Plan Community that has an entrance fee. To receive the most financial benefit, it’s important to move to a community before you need a higher level of care. One of the biggest benefits of Life Plan Communities, is that they offer a continuum of on-site care – often including assisted living, memory care, skilled nursing and rehabilitation – should you ever need it. Other benefits include:  

  • Peace of mind: When you consider the cost of higher levels of care over multiple years, it’s easy to see the financial security a Life Plan Community with Life Care provides. 
  • Tax advantages: Residents of Life Plan Communities generally don’t pay property taxes on their community residences. You could also qualify for sizable tax breaks on portions of your entrance and monthly service fees. Be sure to check with your tax advisor before making your decision. 
  • Low resident turnover: Because the residents of a Life Plan Community are literally invested in where they live, the neighbors you meet and the friends you make when you first move in will likely be your neighbors for a long time to come. That way you can create meaningful relationships with those around you. 

Entry Fee vs No Entry Fee

Is a community that doesn’t charge an entrance fee less expensive? Not necessarily. And the difference could come down to the need for a higher level of care. You should consider if the differences in costs between one-time entry fee and non-entry fee communities may not be as high as they appear at first. Especially when evaluated over a longer term. That’s why it’s important to look at:  

  • What’s the cost of higher levels of care in the community? (If provided.)  
  • If a continuum of care isn’t provided, would you have to move if you needed care in the future? 
  • How does the monthly fee at each community type compare, and what are the services and amenities each one offers? 

Deciding Which Option is Right for You 

A Life Plan Community offering Life Care – like Freedom Village – provides financial benefits you won’t find at different types of communities. If you have more questions about how our entrance fees can benefit you, use our Community Assistant chat feature, or contact us here and we’ll give you the additional information and help you need.