We sat down with Kevin A. Stagg, CPA, Christian Health (CH) Executive Vice President and CFO, to get answers to common questions when considering a Life Plan Community, or continuing care retirement community, like The Vista. One of the biggest questions people face when making retirement decisions is how much they can get for their money. Here is some advice from an expert on how to do just that.
Is a Life Plan Community like The Vista a good fit for me?
Most people assume that they will remain in their homes forever after they retire, but doing so may impact your quality of life. A Life Plan Community offers more than just a residence. It offers a community of friends, an active, maintenance-free lifestyle, and the ability to stay connected to everyone and everything that you enjoy. You will live completely independent while knowing that you will have priority access to the full continuum of care available right on the CH campus if you ever need it.
How does payment at a Life Plan
You usually pay a one-time entry fee upon move in, which is typically paid from the sale of your home, and monthly service fees thereafter.
What’s the bottom line?
Fees generally hinge on four factors: apartment selection, whether you are a single person or a couple, refund option, and contract option.
For example, The Vista offers three refund options: 0 percent declining, 50 percent declining, and 90 percent declining.
- Under the 0 percent declining refund option, the percentage of the entry fee refunded to you or your estate when you leave the campus declines by 2 percent per month for 50 months. After 50 months, there is no refund.
- Under the 50 percent option, the percentage of the entry fee refunded to you or your estate when you leave the campus declines by 2 percent per month for 25 months. After 25 months, 50 percent of the entry fee you paid is refunded.
- Under the 90 percent option, the percentage of the entry fee refunded to you or your estate when you leave the campus declines by 2 percent per month for 5 months. After 5 months, 90 percent of the entry fee you paid is refunded.
And you should also consider the different types of contracts available to you. Unlike many other communities, The Vista has two contract options related to the continuum of care at CH.
- If you select the Fee-for-Service contract, you will have priority access to CH’s other residences and programs on its Wyckoff campus. If you utilize care, you will receive a 10-percent discount on the current rate.
- If you choose the Life Care contract, an additional entry fee and monthly fee are charged. If you transition to another residence or program at CH, you will continue to pay the same monthly Vista fee, plus charges for additional meals and ancillary services. This can represent very significant savings and excellent financial predictability. The entry fee for the Life Care contract is non-refundable.
Do monthly fees ever increase?
Yes – monthly fees are typically adjusted annually to account for traditional inflation. The increase is based on rising costs of labor, insurance, and utilities. To some extent, the increase will mirror the cost-of-living increases you would experience in your current home, or any living situation. The increased fees are only imposed to the extent required to maintain the facilities and quality operations, and to meet other financial requirements. The national average for annual fee increases at Life Plan Communities over the past five years has ranged from 3 to 4 percent.
Will I own my home or apartment? Can I lease it or take out a mortgage to pay the entry fee?
This varies, and of course ownership increases initial and ongoing costs. Another option is the approach taken at The Vista, where residents do not own their apartments; rather, they enter into a lifetime contract, along with priority access to higher levels of care at CH. Because you don’t own the apartment, you don’t have to worry about a mortgage or assigning your right of residency to another person.
Will I pay real estate taxes?
This is dependant on ownership. In The Vista model, you do not directly pay any property taxes. These taxes are part of the operating cost and are included in the monthly fee.
I’m definitely interested in living at a Life Plan Community. What’s the next step?
You will be asked to share a little about yourself, including needed information about the type of home you would like and the level of care you may potentially need. You’ll also likely need to provide a deposit at some point in the process – these are often refundable, as is the case at The Vista.
For a summary of the fee structure at The Vista, a Life Plan community in Wyckoff, New Jersey, please click here.