By Russell W. Hall, CFP®, CPWA®

The vast majority of retirees say that they would like to stay in their own home for the duration of their retirement. This is often called “aging in place”. But for many people, there comes a point where they need to make hard decisions about their living situation and the future.

These decisions are often not made in advance, and are instead forced by other circumstances at an inopportune time. A caregiving spouse may have their own medical issues and can no longer take care of their partner. Dementia creeps up on a parent who has lived alone for many years, and the children do not have the ability to provide care - and sometimes don’t even know what their parent would have wanted.

The alternative is to plan in advance, which often starts with a realistic review of finances. If a retiree never wants to leave their home, are there sufficient assets (perhaps including long-term care insurance) to cover medical costs, especially the extremely high charges of 24/7 in-home care? If not, what other steps can be taken?

One common scenario: retirees plan to sell their home at some point and move to a retirement community. That can seem to provide a clear path through retirement, but also brings with it a host of other decisions, especially at the beginning. For instance, there are many types of retirement living facilities. Why are there so many, and how do you choose?

In this article we attempt to provide an overview of the various types of senior living and care facilities available. For clients here in Southern California, we include local examples of each of these categories (although some easily fit into more than one category).

We’ll start with the Retirement Community (sometimes called Senior Independent Living), since that is the broadest term and is often applied to many of the types of facilities we list here. Generally, a retirement community is residential senior housing designed to accommodate independent seniors with few medical issues. Most will usually include social activities, services (including laundry and housekeeping), and one or more meals. Some offer additional levels of care.

Continuing Care Retirement Community (CCRC)

Retirement community usually paired with assisted living and a skilled nursing facility, all on the same campus. The idea is to provide any level of care that a resident would need, although it may require moving to different areas. These communities usually require a high “buy-in” fee.

Average monthly cost: $7,000 to $10,000 (even higher for additional care levels)

Local examples: Morningside of Fullerton, Walnut Village, Capriana

Assisted Living Community (state licensed)

Retirement communities aimed at those who can live independently in their own housing, but would like on-site access to care, meals, socialization, and additional assistance if they need it. Similar to many ways to CCRCs, but cost is month-to-month.

Average monthly cost: $5,000 to $8,000

Local examples: Oakmont of Fullerton, Sunnycrest, Ivy Park, Emerald Court

Residential Care or Board and Care (state licensed)

Senior care in a small-home setting. These facilities are usually located in residential homes and most feature housing and care for 6 residents, with 2 or more caregivers living on site. Staff help with medication and activities of daily living. Often, these facilities can take residents needing memory care or those on hospice.

Average monthly cost: $4,500 to $6,500

Local examples: The Hills Senior Living, Glenwood Care

Memory Care Facility (state licensed)

Specialized care for those with dementia or Alzheimer's. Some communities only accept residents with dementia. In some larger assisted living facilities, memory care is often a separate, more secure area to prevent patients from wandering. Many Residential Care facilities specialize in memory care, and the home-like setting can sometimes be beneficial and calming for residents who are easily confused and upset.

Average monthly cost: $7,000 to $9,000

Local examples: Park Vista (Morningside), Villagio at Capriana, Crescent Landing Fullerton

Skilled Nursing Facility (SNF)

Often called nursing homes and have also been referred to as convalescent hospitals. This is the highest level of care for those needing medical attention and/or unable to perform activities of daily living (and it is probably the most expensive level of care as well). Residents often receive therapies or hospitalization along with medical care. Medicare pays for up to 100 days of a SNF.

Average monthly cost: $8,000 to $12,000

Local examples: St. Catherine, Gordon Lane

Finally, the following is some advice from a retirement living professional for how to make a good choice on a facility:

Staff matters more than amenities. Compassion is more important than décor.
Research by visiting at different times; watch activities and mealtime.
It’s common to take time to adjust to a new home.

We would like to thank Linda Armas, CPRS, CSA of Clear Choice Senior Services for her assistance with this article.

Schedule a 15-minute discovery call with a fee-only financial advisor if you want help thinking through some of these options.