Budgeting for Retirement: A Breakdown of Independent Living Costs

Seniors looking over budgets

It can be easy to view retirement as a well-earned vacation after decades of hard work. While this may be true in regards to free time, your retirement requires careful financial control and consideration in order to meet your needs. It’s necessary to budget for retirement, considering all your assets and sources of incomes, if you want to move to an Independent Living community and afford the lifestyle of your dreams.

Heather Battey, Executive Director at amavida, a senior living community in Fort Myers, Florida, urges seniors approaching retirement or in the early stages of retirement to budget accordingly for their desired lifestyle. “Seniors need to evaluate the kind of lifestyle they want and think about where they want to live,” says Battey. “They’ll need to weigh the costs of keeping their home versus downsizing to an Independent Living community. If seniors chose a community lifestyle, they’ll want to do their research and consider the long-term costs and benefits involved. It’s a lot to think about, but preparing finances and budgeting now will save you stress and worries down the road.”

Planning for the Costs of Independent Living

If you plan to move to an Independent Living community at some point during your retirement, you need to be aware of the costs involved and determine how you’ll pay for them. The price tag on Independent Living, especially at a Continuing Care Retirement Community, might seem overwhelming, but this price compares to the combined costs of homeownership and taxes, food expenses, future healthcare costs, and the value you place on never worrying about maintenance or chores and having community amenities available.

To get an idea of what you’ll need to budget for when planning a life at an Independent Living community, consider the following costs:

  • Entrance Fees – Depending on the type of community you choose, you may have to pay a one-time entrance fee when you move in or make a deposit on your new home. If you’re moving to a CCRC or other Life Care community, this cost can be significant (similar to the cost of a new home). The reason for a large entrance fee exists in the services offered. Your entrance fee pays not only for your living accommodations, but also the guarantee of future care services available on site.
  • Monthly Fees – Whether or not you pay an entrance fee, Independent Living communities charge a monthly fee. According to Assisted Living Today, the average monthly fee at an Independent Living community in Florida is about $2,500, but it can range from $1,000 to $5,000 or more. The cheaper end of this range reflects a community that simply offers a place to live with few amenities and services, while more expensive fees reflect an increase in campus amenities, services, care accessibility and more. Monthly fees are also typically based on the size of Independent Living home you choose.
  • Taxes – Don’t forget to figure in taxes when you make a retirement budget. Fortunately, there are many tax benefits involved in moving to community or CCRC that offers healthcare. Both entrances fees and monthly fees for these communities are eligible for tax deductions because they go toward current or future healthcare costs.
  • Miscellaneous Costs – While your monthly fee should cover most expenses like rent and utilities, you may need to pay for certain services depending on what your community offers. For example, some Independent Living communities only include one meal per day in their contracts, so you’ll need to budget in a grocery cost as well. Communities may also charge a second-person fee or annual community fees.

Other Budgeting Considerations for Retirees

As you create a budget for your retirement lifestyle, you’ll want to consider some of life’s other necessities that fall outside the world of Independent Living. Think about how the following might affect your budget:

  • Long-Term Care Insurance – Many seniors invest for future care costs with a long-term care insurance policy. It’s best to acquire this early on, as most seniors are no longer eligible after they experience more serious health problems.
  • Financial Planning Costs – Retirement is a good time to review your assets and make legal arrangements in the form of trusts, living wills and financial Powers of Attorney. Consider the costs of finalizing such plans.
  • Managing Income Streams – Your sources of income during retirement could take on many forms from pensions to Social Security, 401Ks or nest egg savings. Depending on how you saved for retirement or what age you are when you retire, you may want to consider supplementing your income with a part-time job.

How amavida Makes Retirement Living Affordable

While the costs of Independent Living can seem daunting, there are many options available for seniors to experience an affordable community setting with lifestyles so luxurious, you won’t believe the value! amavida is one such community, offering resort-style Independent Living at affordable costs. amavida is unique in that is a rental community with a continuum of care, including Assisted Living and Memory Care. Yet, there’s no expensive move-in fee to make it difficult for seniors to buy in to their ideal retirement lifestyle.

“Our community makes luxury living affordable and flexible for today’s seniors,” shares Battey. “Independent Living homes start at just $2,495 a month but include everything from accommodations, maintenance and utilities to access to all the amazing amenities on campus, such as our wellness clinic, spa and salon, swimming pool, art studio, game rooms and more. Plus, each resident receives a monthly $500 stipend to spend at our various on-site restaurants and bars. We also have larger homes and a variety of floorplans to meet every kind of lifestyle.”

In addition to an affordable Independent Living home, residents can enjoy the peace of mind that comes from knowing they won’t have to move away if care needs emerge as they age. With Assisted Living and Memory Care available, seniors can continue to enjoy the amavida life they love and receive the assistance and care they need.

Planning for retirement can be complicated, but amavida is dedicated to helping seniors discover their best retirement life. If you would like to learn more about budgeting for retirement or hear about the services available at amavida, our team would be happy to help.

Keep moving forward. Call us today at 239-895-9191 to learn more about the community that’s changing the status quo of senior living.