What is an entrance fee and what does that cost really cover when considering a senior living community? Forefront Living (FL) CEO, Tim Mallad, and CFO, Steven Ailey, sat down to discuss FL’s entrance fee model, how it compares to rental communities and what prospective residents and their families should consider when evaluating the long-term value of senior living options.
For someone considering a continuing care retirement community (CCRC), the entrance fee can be one of the biggest questions. But rather than viewing it as an additional cost, it is important to think of the fee as an investment in the community and the services it provides. CCRCs offer multiple levels of care, allowing residents to remain in their community as needs change. While a portion of an entrance fee may be nonrefundable, it helps support the community’s services and infrastructure.
A big difference between an entrance fee community and rental community is the amount of common space available for residents to enjoy. Entrance fee communities typically have a wider range of amenities, like larger dining spaces, multiple dining venues, extensive fitness facilities and dedicated staff to support those amenities and activities. Rental communities may have smaller fitness centers and fewer areas for programming, with residents often taking an active role in organizing and planning activities. Generally, rental communities do not require an entrance fee, but monthly costs may be higher.
There is more than one way to structure an entrance fee. Communities may offer contracts with different refund options, allowing residents to choose between a larger potential refund and a lower upfront or monthly cost. The best option depends on what matters most to the individual, including how much they want to leave for their estate and how much monthly income they want available for other expenses and experiences. Before deciding, prospective residents and their families should carefully read the contract, compare the entrance fee and monthly costs, review the organization’s financial history and understand what is provided if future care is needed. When you look at the whole picture rather than just the upfront price, you understand the long-term value of an entrance fee senior living community.
By Amee McGough
