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Retirement

Places to Retire

The Smart Way to Choose a Retirement Community

Moving into a retirement community is a complex and often emotional decision, especially if health issues are a reason. Figuring out the finances of this move adds to the challenge. But by understanding the expenses you'll need to pay, seniors and their families can make the best possible choices.

The good news is more cost data is now available. A Place for Mom, a senior community placement service, just released what it claims is the first pricing survey of these residences—one that is does not rely primarily on data reported by the communities themselves. Its Senior Living Price Index is based on reports from seniors it has placed. The company works with 20,000 residences around the country and advises an average 50,000 families a month.

The prices are listed by category of residence—independent living, assisted living and memory care (for those with dementia) —as well as by region. (The prices for independent living do not include health care expenses, but they are included for assisted living and memory care.) The survey only covers larger communities—those with more than 20 residential units.

Here are the top-level results for each type of community by region, showing average monthly prices:

Independent Living — $2,520 (U.S.); $2,532 (West); $2,362 (Midwest); $2,765 (Northeast); $2,587 (South)
Assisted Living — $3,823 (U.S.); $3,771 (West), $3,825 (Midwest); $4,315 (Northeast); $3,562 (South)
Memory Care — $4,849 (U.S.); $4,787 (West); $4,958 (Midwest); $5,779 (Northeast); $4,345 (South)

Clearly, senior living can be expensive. But keep in mind, these are averages covering a wide range of prices, says Edward Nevraumont, chief marketing officer at A Place for Mom. So look at these figures as just a starting point. And be sure to consider future price hikes, which are likely to outpace inflation, thanks to rising demand for living units.

Prices don't tell you everything you need to know about a residence—other factors can be just as important, though harder to compare. There are communities geared to a wide range of preferences, budget levels, and health status. Some provide a full range of food services and on-site healthcare. Some are tightly regulated (nursing homes), while others are less so (independent living). “In our space, people have no idea of what they’re even looking for,” says Nevraumont.

That’s largely because families tend to wait till the last minute to start planning a move—typically when an aging family member is having health issues. The average person working with A Place for Mom adviser is 80 years old vs. 77 a few years ago. Of the clients the company helps place, five of every eight are single women, while two are men, and one is a couple. The average length of stay is 20 months.

For those considering a senior community, Nevraumont offers these tips:

Start shopping before a move is needed. Aside from the research that you'll need to do, many residences have waiting lists that are months long. You'll also need to have a conversation with all the affected family members to avoid potential conflicts.

Expect the move to take time. You may think you’ll be able to get Uncle Matt into a new apartment in a couple of weeks. The actual process takes an average of three months—or longer, if you're on a waiting list.

Keep cash on hand. No getting around it—senior living communities are costly, especially for those with serious health care needs. So you'll need to build a cash cushion to tap for those bills. “For both your emotional sanity and your financial sanity,” Nevraumont said, “figuring out this stuff early is really important.”

For more advice on choosing a retirement community, take a look at this checklist from AARP.

Philip Moeller is an expert on retirement, aging, and health. He is co-author of The New York Times bestseller, “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” and a research fellow at the Center for Aging & Work at Boston College. Reach him at moeller.philip@gmail.com or @PhilMoeller on Twitter.