When making the decision to move to a full-service retirement community, you will certainly have researched various costs and fees. But did you know that there can be significant tax benefits of moving to a LifeCare community? Now more than ever, economic and financial realities demonstrate why making the move to a community like East Ridge at Cutler Bay can be advantageous to savvy seniors.
What Is a LifeCare Retirement Community?
A LifeCare community is a type of full-service retirement community that offers a complete continuum of care that includes most or all of the following, often called “Levels of Care”:
- Independent Living
- Assisted Living
- Skilled Nursing Care
- Memory Care
- Respite Care
- Rehabilitative Care
- At-Home Care
Most LifeCare communities offer all their levels of care on one campus.
The Benefits of LifeCare
The overarching benefit of LifeCare communities is that by offering a continuum of care, the community provides an ideal way to plan for the unknown. In other words, you don’t know today what type of health care you may need down the road. But LifeCare communities provide all care services you could need, therefore protecting you from worrying about the future.
Specific benefits of LifeCare include:
- Guaranteed access to unlimited care for as long as you are a resident
- Access to every amenity and service the community offers such as fitness center, dining services, wellness activities, housekeeping, landscaping, transportation, etc.
- Guaranteed access to on-site health care services
- Predictable monthly fees
- Tax benefits
- Estate protection with partial refund of the entrance fee to you or your estate once you are no longer a resident
What Are the Types of Entrance Fee Financial Contracts?
When seniors make the decision to move to a Life Plan Community – also called a Continuing Care Retirement Community (CCRC) – they sign a contract or residency agreement.
There are basically three types of entrance fee financial contracts offered by communities that call themselves either a Life Plan Community or CCRC:
- Type A “LifeCare” contract: This option requires a higher entrance fee and monthly fee to prepay for all future health care services. This offers a predictable monthly fee should additional care be needed in the future. A community that offers a Type A LifeCare contract can be called a “LifeCare community.”
- Type B “Modified” contract: This option offers a lower entrance fee and monthly fee. Residents receive some type of discount if health care services are needed in the future.
- Type C “Fee-for-Service” contract: This option offers the lowest entrance fee and monthly fee. If additional care is needed in the future, the resident has priority access to on-site care, but monthly fees will increase to reflect the current market rate of health services.
- Rental Contract options require payment of a one-time community fee along with monthly fees for independent living or higher levels of care if needed. With rental options, your monthly fees likely will increase over time.
East Ridge at Cutler Bay offers a Type A LifeCare contract. This contract option is often considered the gold standard in retirement communities for its assurance of future health care and remarkable asset protection.
Additionally, with a LifeCare Type A contract, your monthly fee will stay relatively stable throughout the time you’re a resident at the community.
If you are not comfortable committing to a Type A contract, East Ridge at Cutler Bay also offers access to our full continuum of care and all our residency options and amenities for a monthly rental fee. And if you start off renting but decide to lock in your rates with a LifeCare contract at a later date, you can do that at any time during your residency.
What Are the Tax Benefits of a LifeCare Community?
There are several significant tax benefits available to residents of a LifeCare community – particularly if you live in Florida.
Zero Property Tax: Depending on the residency contract, residents 55 years of age and above may be able to pay zero property tax on their residence.
Cost Containment Compared to Aging In Place: Many seniors will find that it is less costly to live in a retirement community than to stay at home, or “age in place.” After comparing monthly expenditures (home payment, home maintenance, repairs, lawn maintenance, dining/groceries, electricity, water, transportation, internet, etc.), the costs of living in a LifeCare community often are less than staying at home. Cost containment obviously has a positive impact on future tax burdens.
A LifeCare Contract Limits Future Costs of Health Care: A LifeCare contract inherently limits future costs of health care by prepaying for a portion of your future care needs with your entrance fee.
Tax-Deductible Options in Assisted Living: Should you require assisted living services down the road, certain medical services may be tax deductible. Residents of assisted living may also be entitled to deduct, as a medical expense, a portion of the monthly service fees and entrance fees which represent medical care in the year paid. It’s important to consult with your own personal tax advisor to determine how this applies to your specific situation.
Make the most out of your retirement at East Ridge at Cutler Bay.
When you consider the skyrocketing costs of long-term care, a LifeCare community has the potential to save you thousands of dollars over time – a tremendous value not found in every retirement community.
East Ridge at Cutler Bay allows residents to live life on their own terms and feel at peace with financial security and the reassurance of future health care services. Our knowledgeable marketing counselors welcome your questions about our community and our contracts. Call us today at 305-256-3564 and let us answer your questions.