Senior Living Financial Guide
Senior living financial planning and assessing payment options can make a move to a community like Terwilliger Plaza smoother when the time arises. The decision to transition from living at home to a community with more resources and support is significant and will inevitably raise questions. The most common include: How much does it cost? What's included in the fee? How do you pay for senior living?
Understanding the Fees: What You Are Paying For?
Unlike maintaining a private home, where mortgage, utilities, taxes, maintenance, and repairs are all separate bills, senior living communities typically structure their fees to cover a comprehensive lifestyle. According to the American Health Care Association and National Center for Assisted Living (AHCA/NCAL), the national average cost of assisted living services in 2024 was $5,350 per month. However, it's essential to remember that this is just an average, and the cost also depends on factors such as where you live, the size of the community, included amenities, and healthcare needs.
Cost Structure at Terwilliger Plaza
We are a Continuing Care Retirement Community (CCRC) that's been recognized with CARF-CCAC accreditation since 1997. It's worth noting that less than 10% of CCRCs are accredited, so this is an important distinction we hold by meeting more than 1,200 established metrics. Our costs are based on a membership program structure broken down into two main categories:
Membership or Entrance Fee: This is a one-time upfront cost determined by the size and location of the apartment home you choose. Consider this your investment in the community. It secures your residence and provides you with access to a continuum of care.
Monthly Maintenance Fee: This recurring fee covers the day-to-day services that make life easier and more enjoyable. It varies based on the size of the home and the number of occupants. It includes expenses such as utilities (including basic cable and telephone), housekeeping and linen services, community operations (24/7 staff, security, and events), and property taxes.
Planning for Healthcare and Changing Needs
One of the most valuable aspects of a CCRC is the peace of mind that comes with knowing future health needs will be met. However, it's vital to distinguish between residential costs and healthcare costs. While Independent Living fees cover your lifestyle and residence, healthcare needs, such as assisted living, memory support, or skilled nursing, may incur different costs or structures depending on the community. Planning ahead means considering the "what ifs."
Understanding How to Pay for Senior Living
Financing a move to a senior living community is rarely achieved through a single source of funding. Most families use a combination of resources, taking from various assets and income streams to create a sustainable financial plan. Here are the most common resources families tap into:
Personal Savings and Retirement Accounts: For many, the primary source of funding comes from years of prudent saving. Distributions from 401(k)s, IRAs, and standard savings accounts are often the foundation of the budget. When planning, it's helpful to consult with a financial advisor to determine the most tax-efficient way to draw down these assets to minimize your tax burden.
Social Security and Pensions: Steady monthly income from Social Security benefits and private or government pensions helps cover the recurring monthly maintenance fees. These reliable income streams can be included in your budget.
Long Term Care Insurance: These policies are in place to cover services that standard health insurance and Medicare often do not, such as assistance with daily activities in a community like Terwilliger Plaza or stays in nursing facilities. Reviewing these policies early can clarify exactly how much coverage is available when needed.
Equity in Real Estate: For homeowners, the sale of a primary residence can be a significant resource to pay for senior living. The equity built up over decades can be used to pay the fees. In many cases, the proceeds from a home sale are sufficient to cover the upfront costs, leaving retirement income to handle monthly expenses.
Veteran’s Benefits: Veterans and their surviving spouses may be eligible for the Aid and Attendance benefit. This is a tax-free pension that provides financial aid to help cover the costs of long-term care, including assisted living and nursing home care, for those who served during wartime.
Tax Deductibility: There is often a silver lining during tax season for residents of nonprofit CCRCs. Because a portion of your fees goes toward potential medical care, the IRS may allow you to deduct a percentage of monthly fees as a prepaid medical expense. We recommend consulting your tax professional to see how this applies to your specific situation.
Securing Your Legacy and Lifestyle
With a better understanding of how to pay for senior living at a CCRC like Terwilliger Plaza, you can research communities with confidence. Beyond the resources to pay, choosing a place that offers the services needed now and in the future is essential to a joyful retirement. Contact us to explore how our community can offer not just a home, but a legacy of learning and a life well-lived.
Senior Living Guidebook
It’s easier to make a decision for your future when you have all the information you need. We’ve designed a Senior Living Resource Guidebook packed with helpful insights.