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How Life Plan Communities Take the Guesswork Out of Financial Planning for Retirement

A male and female discussing financial paperwork

As far as we know, no one has developed a reliable way to predict the future. When it comes to planning for retirement, most would agree it would be nice to have some predictability, so you know you have money to do what you want now and in the future.

Making a Well-Informed Decision

Without a crystal ball, the best any of us can do is to make an informed decision. To help you with your retirement planning, start by considering that the U.S. Department of Health and Human Services  estimates 70% of seniors 65 and over will need some form of long-term care in their lifetime for an average of three years. In 2023, a study by Genworth – a company dedicated to helping seniors and their families navigate the cost of health care – found the market rates for higher levels of care in the Philadelphia area were:

  • Home health aide — $6,101/month (assumes 44 hours a week) or $73,212/year
  • Assisted living (like personal care) — $6,986/month or $83,832/year
  • Skilled nursing with a private room — $14,296/month or $171,552/year

These prices make it easy to see why, according to the Fidelity Retiree Health Care Cost Estimate, a single person aged 65 in 2023 may need approximately $157,500 saved (after tax) to cover health care expenses in retirement. An average retired couple may need around $315,000. If there’s one thing that’s fairly easy to predict when it comes to retirement planning, it’s that the cost of care will continue to go up. So, how do you plan accordingly?

One option many older adults are considering as an important part of their financial planning is a Life Plan Community with a Life Care contact. This type of community can help you plan for the costs of long-term care at predictable monthly rates while providing you with a more engaging and active lifestyle.

Value of Life Care

Here’s a high-level explanation of the benefits of having a Life Care contact:

  • Budgeting: You’ll know in advance what your expenses will be month to month, but if you or your spouse needs a higher level of care, you’ll still pay about the same. The only added expense will be to cover the cost of additional meals.
  • Savings: You’ll see substantial savings compared to the average cost of private personal care, memory care and skilled nursing.
  • Asset preservation: By paying lower prices for higher levels of care, you’re preserving your assets over your lifetime.
  • Tax savings: A portion of your entrance fee and monthly fee could be tax-deductible as a prepaid health cost. As with all financial decisions, check with your financial advisor.
  • Peace of mind: Your family members won’t have to worry about what your next move will be if your physical or mental health changes. By pre-planning your future now, you’re maintaining control over those decisions.

What About Remaining in My Home?

Even if your house is paid off, moving to a senior living community might help you save money in some unexpected ways.

  • Unpredictable expenses: It’s nearly impossible to predict what your home maintenance, repairs and upkeep expenses will be from year to year. Then there’s factoring in major repairs like your home’s roof, siding, windows, plumbing and wiring, appliances and air conditioning.
  • Expenses beyond your mortgage: There are three unavoidable monthly expenses – property taxes, homeowner’s insurance and utility payments – and optional homeowner costs like cleaning, landscaping and basic maintenance.
  • Transportation expenses: Between weekly errands for groceries, doctor appointments and social events, it’s not easy to get by without a car. That means you must consider a monthly car payment, auto insurance, gas, annual licensing fees, maintenance and repairs.
  • Home modifications expenses: If you remain in your home, to help with your mobility and ensure you stay safe, you may eventually need to renovate your bathrooms, doorways and stairs.

Add Some Predictability to An Unpredictable World

To learn about your financial options at Freedom Village at Brandywine, including our Life Care contract, you can view our pricing here and then schedule a personal visit by contacting us or by using our Community Assistant chat feature.