yearly cost increases for retirement homes

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lomarica01
Posts: 272
Joined: Sun Jul 05, 2015 10:57 am

yearly cost increases for retirement homes

Post by lomarica01 »

My 82 yo mother is moving into an continuing care retirement home that has options for independent, assisted and memory/end of life care. She will be starting in independent care.

what should I use for yearly future cost increases per year? She wanted to use age 95 for calculating costs, I know some will say use 100 yo which we can also do. Current health is good but with some heart issues.

Also can you pay a bit more per month but with a guarantee of no cost increases for say 3 years? If so is this a good idea/

She will be in northern CA current base prices are about $5-6,000 per month, which includes everything but her phone.

thanks for any responses
stan1
Posts: 14246
Joined: Mon Oct 08, 2007 4:35 pm

Re: yearly cost increases for retirement homes

Post by stan1 »

What has been the past history of increases at the CCRC you are looking at? They should be willing to share that. Otherwise, I'd say plan for 3-5% per year, but a lot of these places have a lot of expenses over the last year and if new ways of doing business for infection control and disease control become standard I could see higher increases. Also if higher wages are needed to attract and retain workers. Even at an expensive CCRC they rely heavily on relatively low wage care-giver jobs.
Topic Author
lomarica01
Posts: 272
Joined: Sun Jul 05, 2015 10:57 am

Re: yearly cost increases for retirement homes

Post by lomarica01 »

the place is only two years old so not much of a price history.
FactualFran
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Joined: Sat Feb 21, 2015 1:29 pm

Re: yearly cost increases for retirement homes

Post by FactualFran »

The yearly cost increases depend, in part, on the type of contract. With a Type A (Life Care) contract, the monthly fee does not increase as a result of a change in level of care (independent living, assisted living, skilled nursing). With a Type B (Continuing Care) contract, the monthly fee increases as a result of a change in level of care.

With both types of contracts, the monthly fee changes yearly based on changes to the cost of providing care.
delamer
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Joined: Tue Feb 08, 2011 5:13 pm

Re: yearly cost increases for retirement homes

Post by delamer »

My mother had a Type A contract, so no increase in the base fee when she moved into skilled nursing care from independent living.

However, there were fees for various supplies related to her care that were roughly $500/month in added costs.

I agree with the 3% to 5% for the base fee annual increase. That’s what my mother experienced. They also provided a discount if you paid the full annual bill in January.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
WillRetire
Posts: 781
Joined: Mon Jun 05, 2017 10:01 am

Re: yearly cost increases for retirement homes

Post by WillRetire »

CCRCs file annual disclosures in many states. Those disclosures publish monthly fee figures for the past several years. 3-5% is what I've seen in the 2020 & 2021 disclosures. The 3% was an anomoly, at a place that increased its entrance fees by a lot in the past year.
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