How much are retirement homes?
One of the biggest decisions you have to make as a retiree is where to live in retirement. Find out how much retirement homes cost and the various options you have.
When planning your retirement, one of the things you have to figure out is where to live after retirement. You may consider moving into a retirement community, retirement home, or age in place. Whichever option you choose, it might help to know how much you will pay and how the various options compare.
If you plan to buy a new retirement home, you can expect to pay anywhere from $200,000 to $1 million depending on the location, type of housing, and amenities available. If you plan to move into a retirement community, you can incur about $1,500 to $6,000 or more every month, in addition to an entrance fee that may be repayable or non-repayable.
What is a retirement home?
When planning your retirement, you should compare the various retirement home options available to retirees. Generally, retirees can decide to build or buy a retirement home, move into a retirement community, or choose assisted living.
If you are in good health when you retire, you can buy a new retirement home. The home should take into consideration things like mobility and accessibility by including features that you may need in old age. Some key features of an ideal retirement home include wide hallways, no steps, adjustable lighting, and raised electrical outlets.
You can also decide to move into a retirement community, also known as a senior living community. A retirement community is a residential community for older adults above 50 who are capable of living independently and do not require specialized medical care. These communities can be condos, duplexes, single-family homes, or other types of housing, and they may provide add-on products and services like an on-site gym, laundry services, transport, community recreation events, and on-site dining.
If you are not able to live independently and you need some help in your daily life, you can consider moving to a nursing home or assisted living facility. This retirement option allows residents to enjoy round-the-clock medical care as well as assistance with basic chores like laundry, cleaning, and transportation.
Buying a home after retirement
If you are a few years away from retirement, you must figure out where you will live. If you want to move to a new state that is friendly to retirees or move closer to your grandchildren, you can decide to buy a home that fits your retirement lifestyle. A retirement home can cost anywhere from $200,000 to $1 million or more.
If you plan to downsize, you can sell your current home and move into a smaller home in your current location or another city or state. Once you sell your old home, you can use the equity to buy a lower-priced home with the features you desire in your new home. You can then use the leftover money to boost your retirement savings.
If you are worried about the rising property taxes and maintenance costs of your home, you can opt to rent. Some retirees find renting ideal for their retirement lifestyle since it gives them the flexibility to travel without worrying about maintenance costs.
Aging in Place
If you are not interested in buying a home or moving into a retirement community, you can opt to age in place at your retirement home. Most Americans prefer to stay in their current homes where they have made memories.
As you get older and become dependent on other people to manage your daily life, you may need to make significant modifications to your home to make it elderly-friendly. Key modifications you can consider doing include widening doorways, installing grab bars, adding support bars to the bathtub, adjustable or voice-controlled lighting, and switching to safer floor solutions. The cost of making these modifications can be anywhere from $20,000 to $30,000.
Moving into a retirement community
If you plan to move into an established senior living community, the amount you pay may depend on several factors. Some of these factors include the type of housing, available amenities, entrance fees, and monthly fees, as well as the location of the community.
Generally, if the retirement community is located close to a metropolitan area, and provides more amenities to residents, you can expect to pay a high price tag to move into this community.
Here are retirement community costs you can expect to incur:
Some retirement communities may require new members to pay an entrance fee before being admitted into the community. The amount you pay as entrance fees depends on the type of housing provided and the services/amenities available to residents.
The entrance fee can be non-repayable or repayable; a non-repayable entrance fee won't be refunded if you decide to move out of the facility while a repayable entrance fee offers some repayment in the future if you decide to move out.
Retirement communities charge a monthly to cater for ongoing expenses such as meals, transport, medication, and household maintenance. The monthly cost can range from $1,500 per month to $6,000 or more for a retirement community with more amenities. The monthly fees can vary depending on the level of luxury, size of space occupied, and the level of care that residents receive.
If you are age 55 when you move to a retirement community, you should figure out how you will finance the retirement community costs. If your job qualifies for social security, you must be at least 62 to receive these benefits. If you have an IRA or 401(k), you can take distributions before 59 ½, but you will owe taxes and penalties on the withdrawals you make. However, you can tap into your savings accounts and brokerage accounts to raise the funds needed to become a resident of a retirement community.