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
yearly cost increases for retirement homes
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Re: yearly cost increases for retirement homes
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.
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Re: yearly cost increases for retirement homes
the place is only two years old so not much of a price history.
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Re: yearly cost increases for retirement homes
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.
With both types of contracts, the monthly fee changes yearly based on changes to the cost of providing care.
Re: yearly cost increases for retirement homes
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.
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
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Re: yearly cost increases for retirement homes
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.