If you’re approaching retirement age, the idea of moving to a retirement community can seem like a great option.
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These communities are residential neighborhoods or housing complexes specifically designed for those over age 55. The purpose is to foster connection and community among older adults, especially as they enter their golden years. Many come with added amenities like golf courses and socialization activities like clubs.
While this style of living may sound ideal, there are financial downsides to consider before joining a 55+ community.
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Upfront Costs
The median cost of senior independent living is around $3,000 per month in 2023, according to senior living website A Place For Mom. That number varies based on location, amenities, and specific unit.
Due to their perks and added amenities, many of these communities are the same or more expensive as buying an apartment or home in that community. There are also homeowner’s association fees to contend with, which include the cost of home repairs and/or lawn care. You may also have to pay a monthly fee to access facilities and services.
Reselling Challenges
Attempting to resell a home in a 55+ development is a bit more complex than selling in the regular housing market, according to RealtyBizNews.
Since all residents must meet the minimum age requirement, it limits the buyer pool for your property. You’ll also have to work within the community’s bylaws around selling. This also makes it more difficult to pass your home down to adult children who haven’t reached the minimum age.
If you’re unable to sell on the market, some communities offer a buyback program that will purchase your home at a fixed rate. However, you may not be able to make the same type of profit on this sale.
Loss of Independence
Retirement communities promote activity — but they also involve oversight. Governing boards will have strict rules and regulations on how you can renovate your home, design your yard, or even how you use the amenities.
For example, some clubs and restaurants may set their own hours — and if your community is more remote, you may be at the mercy of those facilities. You may also simply grow tired of the activities and want more variety.
Future Health Needs
As you grow older, your needs often change, and it’s especially important to start thinking about potential health issues. Unlike retirement homes or assistant care facilities, most retirement communities don’t have on-site medical care.
Some may offer transportation services or other basic health services, but it’s important to consider how often (and how soon) you may need more access to health care services. The last thing you want is to get locked into paying for a community and then have to leave a few years later because you need more round-the-clock care.
It’s also important to budget for these additional healthcare costs and understand your retirement community likely won’t cover them.
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For those with chronic conditions or a higher probability of needing regular care, you should think through whether joining a retirement community is worth it.
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This article originally appeared on GOBankingRates.com: The Financial Risks of Retiring in a 55+ Community