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Paying for Independent Living

Page Reviewed / Updated - November 30, 2019

Independent Living Background Information

As the name “independent living community” suggests, these communities, which may also be called retirement communities, 55+ active adult communities, or independent senior living, are intended for elderly persons who can still live independently, but desire less stress and day-to-day responsibility. In comparison to other senior living options, such as assisted living and nursing home care, independent living communities offer the least restrictive living environment. To be clear, unlike assisted living and nursing homes, independent living communities do not provide assistance with activities of daily living, such as bathing, dressing, eating, and mobility, nor do they provide medical care.

Residents of independent living communities are able to maintain their privacy, residing in apartments, condominiums, townhomes, cottages, and even individual houses. However, they are free of the tasks associated with homeownership, such as maintenance, repairs, and yard work. Most senior communities also offer meals, laundry, and house cleaning, eliminating the need for residents to do these time-consuming activities. Shared common spaces, such as dining rooms, recreational centers, landscaped outdoor areas, and sitting rooms, allow for ample opportunities to socialize and be an active member of the community.

Services Provided in Independent Living Communities

The services provided in senior living communities is one of the draws of living in this type of community. Below is a list of commonly provided services, some of which may come with an additional fee. Please note that available services and potential extra fees are based on the individual retirement community. Therefore, when researching and considering various communities, it is imperative to ask each individual community what services they provide and if any of the services cost extra.

Home Maintenance / Yard Work

Residents do not need to worry about taking care of home maintenance, yard work, and landscaping. This means no more raking leaves, mowing, cleaning gutters, shoveling snow, or hiring someone else to do these types of tasks.

Dining

While most independent living communities do offer senior housing with full or partial kitchens, nutritious chef-prepared meals in a shared dining room offers an alternative to cooking. Some communities have additional dining options, such as cafes, restaurants, and even pubs.

Transportation

Although seniors residing in independent living communities are permitted to have their own vehicles, transportation services make it unnecessary. From going to doctor’s appointments to running errands to participating in activities outside of the community, the driving can be left to someone else.

Housekeeping / Laundry

Most senior living communities offer housekeeping (sweeping, vacuuming, mopping, dusting, etc.) and laundry service.

Social / Recreational / Educational Activities

The array of activities offered in senior living communities presents a wonderful opportunity for residents to remain active, socialize, make new friends, and expand their knowledge. Examples of available activities might include art and craft workshops, book clubs, exercise and dance classes, game tournaments, holiday gatherings, movie nights, and outings to local restaurants and events.

Outside Assistance

While independent living communities do not provide personal care assistance or any type of home healthcare, residents are able to hire outside help. For some residents, hiring a personal care attendant or a home health aide can enable them to live or remain living in the community.

Security / Onsite Staff

Many senior living communities have security surveillance, as well as 24-hour on-call staff.

Did You Know? According to a 2018 survey by the American Association of Retired Persons (AARP), approximately 75% of 50+-year-old Americans would like to remain living in their homes as they age. This, in part, could be due to a misconception that moving into a senior living community, which includes both independent living communities and assisted living communities, means losing independence. However, a 2013 report by the Assisted Living Federation of America (ALFA) found that 93% of assisted living residents were satisfied with their level of independence.

Independent Living vs. Assisted Living

Like independent living communities, assisted living communities allow residents to retain their independence as much as they wish. However, unlike senior living communities, assisted living communities do provide assistance with activities of daily living (i.e., bathing, dressing/undressing, personal hygiene, and medication management) and supervision. Generally, there is also a healthcare professional, such as a nurse practitioner, on-call 24-hours a day. Furthermore, some assisted living residences provide specialized care, such as Alzheimer’s and dementia care (memory care) and stroke care. Therefore, the main distinction between these two types of living situations is that residents of independent living communities can function independently, while those who reside in assisted living require some assistance.

Who Should Consider Independent Living?

Since independent living communities are not the right living environment for all seniors, it is important to touch on who might be a good fit for this type of living. Below, we include the pros and cons of moving to an independent living community to better assist readers in deciding if it might be a good option for oneself or a loved one.

Seniors Who Might be a Good Fit for Independent Living

  • Seniors who want to live an independent lifestyle, but don’t want to be bothered with daily maintenance of their home and yard, house cleaning, laundry, and/or cooking.
  • Seniors who desire an active life and wish to socialize and connect with others in the same age group.
  • Seniors who want new experiences and to learn and evolve through activities.
  • Seniors who feel isolated or depressed, have a home that is too large for them, or have difficulty maintaining their current home.
  • Seniors who want privacy, yet would like additional security, as well as peace of mind knowing that onsite staff can be called in an emergency.
  • Seniors who want to live in a quiet and peaceful setting where children come and visit, but don’t reside.

Pros of Moving to an Independent Living Community

  • Convenience- Many of the tasks of living independently are taken care of by someone else. For example, residents are no longer responsible for home and yard maintenance.
  • There are many amenities, which depending on the community, may include restaurants, coffee shops, barbershops and beauty salons, fitness centers, golf courses, tennis courts, pools, and more.
  • Residing in an independent living community makes having an active social life and connecting with other seniors easy.

Cons of Moving to an Independent Living Community

  • It can be stressful for seniors who will be selling their current homes to move to an independent living community. Furthermore, it can be frightening to leave a home where many years have been spent and move into one that is new and unfamiliar.
  • In comparison to assisted living, there is no onsite medical care or personal care assistance.
  • There is no age diversity in independent living communities. All residents are seniors.

The Cost of Independent Living

The cost of residing in an independent living community varies greatly based on the state in which one resides, the size and type of housing (i.e., a studio apartment versus a 2-bedroom house), the available amenities, and the included services. In some independent living communities, meals, laundry, housecleaning, and transportation may be included in the monthly fee, while other communities charge an additional fee for these services. Additionally, certain amenities, say a private golf course, may come at an extra cost in the form of a membership fee.

Unfortunately, the cost of specific communities is not readily available, as most communities don’t publish this information. However, on average, the monthly cost ranges from $1,000 to $10,000, or put another way, the annual cost ranges from $12,000 to $100,000. Please keep in mind that this price range includes very basic independent living communities, as well as ones that are extremely luxurious.

In addition to the monthly cost, some independent living communities charge a one-time entrance fee ranging from $500 and $1,500.

Paying for Independent Living

Medicaid and Medicare are not options for financial assistance in paying the monthly fee for residing in an independent living community. However, for seniors who require in-home care assistance, Medicaid, Veterans benefits, or long term care insurance may assist in covering this cost. To cover the price of an independent living community’s monthly fee, most seniors pay privately. For instance, they might use their retirement funds and/or monthly income. Below are a few ways in which some seniors come up with the funds.

Reverse Mortgages

For seniors who are not selling their current home right away, reverse mortgages, which allow one to borrow cash against their home equity, might be an option. This, however, would only be a short term solution, as the loan becomes due a year after the senior moves from his or her home. The one exception would be if there was a spouse still living in the home, given both spouses are on the loan. Note that this type of home equity loan is restricted to seniors 62 years of age and older.

Selling / Renting One’s Current Home

Selling one’s current home and using the funds to pay to live in an independent living community makes sense for many seniors. For those who don’t wish to sell, or there are extenuating circumstances that make selling the home difficult, renting it out is another option.

Life Settlements

A life settlement is when a senior sells their life insurance policy to a third party for a lump sum of cash. The amount of cash one receives is more than the cash surrender value, yet not as much as the death benefit. Since the cash from the sale can be used however the senior sees fit, this makes life settlements a viable option to pay for an independent living community. Learn more about life settlements here.