Living in a retirement community typically costs thousands of dollars per month and potentially hundreds of thousands of dollars in up-front entrance fees as well.
But what, precisely, do you get for all that money? And will you or your heirs get the entrance fee back if you pass away, change your mind or require specialized care that the complex can’t provide?
The answers depend on terms buried deep in the contract you sign. Unfortunately, few people bother to read their retirement-community contracts closely. Hire an elder-law attorney to review the contract before signing, or at the very least, ask a retirement-community representative to point you toward the sections of the contract that clarify key issues, including…
Are entrance fees refundable? Under what circumstances? For-profit retirement communities traditionally have “fee-for-service” contracts, in which entrance fees are fully refundable upon the resale of the unit. Nonprofit retirement communities are more likely to have “life-care” contracts, in which entrance fees are partially refundable at first but become completely nonrefundable after a few years. This can vary, however, and is sometimes negotiable.
Is this a Medicaid-certified facility? If so, Medicaid will pay for your continued stay should you run through your assets.
Which expenses are included in your basic monthly fee (or “daily rate”), and which cost extra? For example, what nursing and skilled-care expenses are included? What meals, housekeeping services, over-the-counter medicines and health-care products? And what utilities, such as phone or cable-TV?
Will your monthly fees increase if your care needs do? In general, your monthly fees should not increase dramatically if you sign a “life-care” contract (though they probably will increase with inflation). They likely will if you sign a “fee-for-service” contract and later require more extensive care.