Just last week here on the Blog, we brought you an article suggesting that aging in place, while the preferred choice of about 9 out of 10 seniors, might not be right for everyone. This week, we’re bringing you the other side of the coin, in a sense. It’s an article pointing out that the choice to live in a retirement community may offer some benefits – but it also comes with significant drawbacks.  The familiar lesson: buyer beware, especially when it comes to costly housing choices. 

We came across this article on the Moneywise website, written by freelance contributor Lou Carlozo. Carlozo seems to use a bit of overheated language to make his point, but we do agree that there is no one-size-fits-all solution to retirement living, no matter what the glossy brochures from the retirement community may say. Before making an expensive move that you might regret, take time for an objective evaluation of the plusses and minuses. 

Based on our take on this article, the listed drawbacks seem to boil down to one key question: do you want to live in a costly retirement community filled with people exactly like you? Or would you be happier in a place that’s more affordable and more diverse?  Let’s check out Carlozo’s points and see if they resonate as you choose the housing option that’s best for you. 

“Self-Indulgent Baby Boomers” Fill Many Retirement Communities 

Carlozo’s bias seems evident from the start of his article. “The expression ‘birds of a feather flock together’ leaves plenty of room for, well, ruffling feathers — especially where retirees are concerned,” he writes. “There are plenty of benefits to independent living communities for those over the age of 55 — from socialization opportunities to living a low-maintenance lifestyle — but what are the downsides?” 

Carlozo cites Central Florida’s The Villages as Exhibit A. This mega-development he says, is the world’s largest, with nearly 80,000 residents in roughly 32 square miles (larger than San Francisco). He even calls The Villages “the most infamous 55-plus community” because “it sometimes gets bad press, in part due to its reputation as ground zero for self-indulgent baby boomers.”  (We checked out several articles about The Villages and found most of the negatives were due to high cost, lack of diversity, and a highly conservative political environment. Some also cited high average heat and humidity and an abundance of bugs – which shouldn’t surprise anyone moving to Central Florida.) 

That said, here are the five chief drawbacks from the Moneywise report. 

Retirement Community Drawback #1: Lack of Affordability 

“Retirement communities offer older Americans amenities such as group activities, transportation options and housekeeping services, among others,” Carlozo acknowledges. But there’s clearly a fiscal downside: “While these are certainly perks and offer opportunities to make new friends and enjoy leisure time, it can put strain on your wallet.” 

Carlozo cites a recent study conducted by the caregiver resource company A Place for Mom. It found that the national median monthly cost for independent living in a retirement community is $3,100. This figure clearly varies by state: in Washington, for example, which is home to AgingOptions and LifePoint Law, the average monthly cost is closer to $3,600. 

Compared with the average cost of assisted living — nearly $5,000 per month — this seems relatively inexpensive. Still, independent seniors on fixed income may balk at the cost of retirement community living, finding it beyond their budget.  

Beside the monthly rent, there’s also the entry fee charged by many communities to buy into the residence. “According to Simply Senior Living, [the entry fee] can add an additional $30,000 to your bill. Although typically refundable, entrance fees can still be a significant out-of-pocket expense for many.” (We know of many retirement communities whose entry fees equal ten times that amount, or more.) 

Retirement Community Drawback #2: Paying for Unused Amenities 

The monthly rent, says the article, is just the starting place. “Even if you can afford to live in a 55-plus community, additional fees will have a way of eating into your retirement budget,” says Carlozo. “For example, amenities can total roughly $200 a month, meaning an annual outlay of $2,400. (The Villages in Florida, for example, charges $195 a month.)” 

On the positive side, when you move out of your own home, you leave behind the costs of utility bills, regular maintenance, and so on. However, as the Moneywise article observes, retirement community residents are charged these amenity fees regardless of use. As Carlozo explains, “While these expenditures cover items such as maintenance, entertainment and classes, you’ll have to pay them regardless of whether you use all the associated services.”  

That means, when considering moving to a senior living community, ask yourself if all those glitzy amenities are really something you’ll use, or just an added expense. You might be happier in a less expensive community with fewer bells and whistles. 

Retirement Community Drawback #3: Lack of Diversity 

If living among a diverse population of people from a wide range of cultures and ethnicities is important to you, a retirement community might not be the best choice. 

“When considering the racial disparities in many retirement communities across the country, the numbers can be quite shocking,” Carlozo writes. “For example, according to data from the United States Census Bureau, 97.4 percent of people living in The Villages in Florida are white, while Black residents make up only 0.4 percent.” Latino residents make up an additional 1.4 percent at The Villages. 

Carlozo’s article says that, across the U.S., senior living communities have “a significant diversity problem.”  This is often due to harsh economic disparities. According to a 2020 article in the New York Times, Black and Latino retirees lag significantly behind their white counterparts.  Says the article. “In 2016, the typical Black household approaching retirement had 46 percent of the retirement wealth of the typical white household, while the typical Hispanic household had 49 percent, according to a study by the Center for Retirement Research at Boston College.” 

Many retirement communities turn into racially and ethnically homogenous enclaves, which might not be the type of environment where you would choose to age. 

Retirement Community Drawback #4: Generational Isolation 

If a lack of racial and ethnic diversity is one significant drawback of retirement communities, there’s another that should be obvious: generational segregation. This lack of age diversity can rob you of the benefits of living among people of all ages. 

“Paul Irving, founding chair of the Milken Institute’s Center for the Future of Aging, said that 55-plus communities lack another kind of diversity: intergenerational relations,” says Carlozo. “Although many senior living locations allow visitors, you might want to reconsider a lifestyle that solely places you with those in your age demographic.” 

“These places can seem safe choices in a youth-focused America that stigmatizes aging,” he wrote in 2021. “But studies confirm that the intergenerational connections and sense of purpose associated with these types of living and learning arrangements foster health, positive attitudes and well-being.” 

Another study published in the National Library of Medicine called intergenerational relations “an integral part of the cultural makeup of society.” Do you really want to live in a community where everyone is the same age as you – or older? It’s a provocative question. 

Retirement Community Drawback #5: The Need to Adapt 

Relocation can be tough at any stage of life. Carlozo writes, “At the end of the day, moving into a new space (not to mention downsizing) can be a jarring experience for anyone, regardless of age.”  The older we become, the harder it can be to adapt to a new home, especially if that home is a retirement community where every single aspect of life is different from what we’re accustomed to. 

But in the final analysis, the Moneywise article concludes, the decision boils down to what’s best for you and your loved ones. 

“There are a lot of unknowns to consider: location, cost, distance from loved ones, extracurricular activities, et cetera,” Carlozo concludes. Still, if the sense of community offered by an independent living facility appeals to you, do your due diligence and some careful research. Ask careful questions and seek objective advice. It’s a big, costly decision. 

For additional insight, check out this Blog article from early 2024 offering some helpful perspective as you evaluate independent living options. 

Rajiv Nagaich – Your Retirement Planning Coach and Guide 

The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public. Retirement: Dream or Disaster joins Rajiv’s ground-breaking DVD series and workbook, Master Your Future, as a powerful planning tool in your retirement toolbox. As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.  

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read. 

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more. 

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.  

Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important message. And remember, Age On, everyone! 

(originally reported at https://moneywise.com)