03/18/2024
If you’ve been exploring your retirement living options, you’ve probably come across terms like active adult, 55 plus and Life Plan Community (among others). So why are there so many different terms that seem to describe the same lifestyle? How are they similar and how are they different? To help you find the right choice for you and your goals, here’s a brief overview of each and an option that combines the best of both.
What is a 55 Plus Community?
These are communities designed for adults ages 55 and older who are looking for a low-maintenance or maintenance-free lifestyle. These communities are a great option for active adults looking for carefree independent living. At a 55+ community, you typically buy your residence. Like other real estate transactions, the price you pay depends on the size of the residence and its desirability. Here are the major pros and cons of 55+ communities: Pros- Active social life: Your neighbors will be of a similar age, often having similar interests and backgrounds.
- Lots of amenities: Communities typically offer amenities like tennis courts, golf course, swimming pool, walking trails, fitness center, etc.
- Financial options: 55+ communities don’t have large upfront entrance fees, but the purchase price of your residence will be comparable to the value of homes in the area.
- Additional costs: You’ll be responsible for real estate taxes, homeowners’ insurance, HOA (or similar) fees to cover the cost of outdoor maintenance and services and amenities. Also, some utilities may not be included.
- Household chores: You’ll be responsible for your home’s indoor maintenance, upkeep and housekeeping.
- Dining: While there may be on-site dining options available to you, they won’t be included in your monthly fees.
- No on-site health services: If you or your significant other or spouse need care, you may have to move again.
What is a Life Plan Community?
At first glance, a Life Plan Community looks and feels a lot like a 55+ community. They both can offer the same or similar amenities. However, Life Plan Communities offer added health care services on-site that allow you to age in place. Typically, instead of paying additional real estate taxes required when you live in 55+ communities, residents of Life Plan Communities basically prepay for future health care needs (which may come with tax benefits). Consult with your tax advisor on your individual situation. Pros- All-inclusive lifestyle: A monthly fee covers amenities, wellness programs, maintenance, activities and dining.
- Active social life: Live among active adults of a similar age and interests who want to enjoy life to the fullest.
- On-site health services: Never change communities again because of future health care needs.
- Tax breaks: A portion of your entrance and monthly fee could be tax-deductible. Consult with your tax advisor.
- Refundability: A portion of your entrance fee may be partially or even fully refundable to you or your estate.
- Unneeded care: There’s a chance you could pay for care you don’t end up needing. However, according to the U.S. Department of Health and Human Services, 70% of seniors 65 or older will need some type of long-term care.