‘I’m here until I die’: Rich older Americans are paying millions just to get into luxury retirement campuses — monthly costs can then exceed $10K and health care plans can reach $7M

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Today's retirees aren't satisfied with staying home to play shuffleboard or languishing in low-budget nursing care homes. Instead, a growing number of older Americans are choosing life plan communities.

These communities typically feature independent living arrangements such as apartments but also have on-site units that can provide more intensive care when needed. They are usually located near college campuses and also offer a variety of amenities and social opportunities that make them very appealing to active seniors.

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The cost of living in life plan communities can vary, with some communities having an average price tag of $100,000 to $400,000, while others in high-cost areas can reach as high as $1.7 million to $7.3 million for a single apartment in a location like Palo Alto.

Here's why retirees are willing to pay a premium price for a life plan community.

Life plan communities provide a higher quality of life and several options for older adults.

They also provide guest lectures. They also offer more traditional nursing home facilities where retirees can be transferred if and when they need it.

Moving into a campus may require purchasing a unit and paying a monthly fee, which the Journal reports averages $4,800 per month, but can be much higher. The fees cover things such as transportation to medical appointments, as well as community activities. Retirees may also choose a comprehensive care agreement that secures their rate, even if they need more intensive care.

Regardless of how the fee system works, they're well-liked both because of the simplicity they offer, and because they can provide structure and socialization when work no longer fills the hours.

Actually, one retired lawyer who's been waitlisted for several communities told the Journal, “if we could move into a community while still in a good place physically and mentally, where we can form new friendships, I think it will lead to a more fulfilling life.”

A local resident referred to it as "a gift to our kids," as the community would be able to take care of them as they get older. They wouldn't have to rush to find care after a medical emergency or have to live a lonely life, relying on their children to drive them to doctor appointments and the store.

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Are the benefits of these communities worth the costs associated with them?

It's unlikely that many people can afford to pay hundreds of thousands of dollars upfront for a unit in a life-plan community, and the ongoing monthly fees will just put a further strain on their finances.

A private room in a nursing home typically costs around $9,733 per month, which may not be significantly higher than what a standard nursing home costs, depending on the specific facility and whether an all-inclusive care plan is selected.

— and worse yet, more uncertain.

Some seniors have reported that these life-plan communities cost less in the long run since they provide all their necessary expenses. "I would be paying more if I lived in my very large house," said Jane McCaffrey, a retired CPA. McCaffrey noted that this is particularly true if she requires nursing home care, which would be covered by her all-inclusive care agreement.

I plan on sticking around until the end of my lifespan.

For seniors who can afford these programs, the hefty price tag may well be worth the peace of mind that comes from having their care plan in place – especially when combined with all the social and emotional benefits that being in a lively community offers.

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This article is for informational purposes only and should not be taken as professional guidance. It is provided without any guarantee or warranty of any type.