Senior Living Costs Explained: Insights from Our CFO

What makes senior living a wise investment for them—especially a Life Plan Community (LPC)?

Kevin McDonnell, CFO: Choosing a senior living community is smart for a number of reasons that help ensure residents live with confidence and thrive in community. Being part of an LPC like Life Enriching Communities (LEC) is beneficial as we:

• Consolidate unpredictable expenses into a predictable monthly fee
• Provide a broad range of options to maximize your quality of life
• Offer the best care

When someone looks at your pricing, what do you want them to understand first?

Kevin McDonnell, CFO: It’s important to compare long-term affordability when evaluating pricing between communities. Though prices vary by location and accommodation size, the key pricing factors include entrance fees and monthly service fees. Entrance fees are a one-time, partially refundable payment, and the monthly service fees cover other services, such as:

• Meals
• Maintenance
• Utilities

How does your partially refundable entrance fee work, and what should someone understand before they decide?

Kevin McDonnell, CFO: A refundable entrance fee price model mirrors home ownership. The higher the entrance fee, the higher the refundable percentage. Residents typically use a portion of the proceeds from the sale of their homes to fund the entrance fee, while monthly fees are primarily covered by Social Security, IRAs, and investments. The best option for any prospect depends on various personal factors, including:

• Available funds
• Projected length of residence
• Tax ramifications on capital gains
• Personal preferences

Life Enriching Communities is a not-for-profit LPC, can you explain what benefits this has to our residents?

Kevin McDonnell, CFO: As a not-for-profit LPC, we won’t ask a financially-qualified resident to leave if they outlive their financial resources or experience unexpected healthcare expenses. We believe everyone deserves the opportunity to live their best life, and this promise gives residents confidence and comfort as they face an uncertain future. LEC is focused on the mission of providing exceptional everyday experiences for our seniors, not on maximizing profits. That’s why The LEC Foundation manages multiple donation funds that enhance our residents’ lives now and in the future:

• Benevolent Care
• Pastoral Care
• Greatest Needs

What would you encourage prospects to ask their financial advisor as they discuss their interest in a senior living community?

Kevin McDonnell, CFO: Financial advisors can often forecast expected income in the future. This would be a combination of sources, including:

• Social Security
• Pensions
• 401(k)s
• Investments
• Savings

Becoming a resident in a not-for-profit LPC is about preparing for the future and ensuring one’s projected income covers future costs. Financial advisors can also help with evaluating the financial strength of for-profit and not-for-profit LPCs

What advice would you give to prospects when making the great financial decision of choosing a senior living community?

Kevin McDonnell, CFO: I always advise prospects to research options and plan as early as possible, including my mom! It’s important to research the financial strength of the communities available and ask lots of questions, such as:

• Whether they are a mission-based not-for-profit community.
• How they maintain their financial sustainability.
• How they reinvest in the facility.

Additionally, joining the waitlist secures a plan in place for the future as you evaluate your options and even makes the community events and programs available for you to enjoy beforehand.

Life Enriching Communities is committed to equipping you with a plan for the future. Learn more about our senior life plan communities at lec.org.