Understanding Your Investment in Life Plan Community Living
If you’ve been researching your options for fun and active retirement living that offers long-term security and enhanced care level options should you ever need them, you may have come across a new term: entrance fee. Understanding what an entrance fee is—and how it works—is crucial to making an informed decision about your retirement future.
Fountaingate Gardens, a Life Plan Community located on the Gurwin Healthcare System’s 36-acre campus in Commack, offers its members independent living on Long Island, complete with exceptional services and amenities. Like many Life Plan Communities, residency requires an entrance fee and a monthly service package. But what exactly is an entrance fee, and how does it differ from a real estate purchase?
The Entrance Fee: Your Investment in Security and Lifestyle
An entrance fee is a one-time upfront payment made to a Life Plan Community that serves multiple important purposes. Think of it as a key that unlocks not just a living space, but access to a comprehensive lifestyle and healthcare security system that can serve you for life.
According to industry research, about three-quarters of all Life Plan Communities require an entrance fee, with the average entrance fee around $400,000 nationally.
What Your Entrance Fee Guarantees
Priority Access to Healthcare
Your entrance fee guarantees priority access to future healthcare from the highly regarded Gurwin Healthcare System, including assisted living, short-term rehabilitation, memory care, and skilled nursing care—all on the same campus where you live.
“A Home for Life” Promise
Perhaps most importantly, your entrance fee provides the assurance that should you exhaust your assets through no fault of your own, you will never be asked to leave the community. This protection offers invaluable peace of mind for you and your family.
Comprehensive Lifestyle Access
Your entrance fee covers access to all community amenities, services, and programs, from fitness centers and dining venues to cultural activities and social programs.
Your Entrance Fee Options
At Fountaingate Gardens, we understand that everyone’s financial situation and estate planning goals are different. That’s why we offer multiple entrance fee options to meet your specific needs and preferences.
The Traditional Option: Lowest Upfront Investment
Best for: Residents who aren’t focused on estate preservation or have already made plans for additional assets.
The traditional option—sometimes called the declining balance entrance fee—requires the smallest upfront investment. [Average entrance fee with modified contract: $505,000](—less than the average home value in the Commack area).
How it works: This option does not guarantee a specific percentage will be returned to you or your estate when you leave. The refund amount decreases over time based on your length of residence and eventually reaches zero, typically after several years.
Advantages:
- Lowest initial financial commitment
- More funds available for other investments or expenses
- Full access to all community amenities and services
The 50% Refundable Option: Balanced Protection
Best for: Residents seeking middle-ground asset protection with moderate upfront investment.
This option provides a balance between affordability and estate protection. [Average entrance fee with modified contract: $644,000](—representing a 25% decrease from the 80% refundable option.
How it works: Regardless of how long you live in the community, you or your estate will receive back 50% of the entrance fee upon departure or death.
Advantages:
- Moderate upfront investment
- Guaranteed asset preservation for estate
- Protection against total loss of entrance fee investment
The 80% Refundable Option: Maximum Estate Protection
Best for: Residents prioritizing estate preservation and asset protection for heirs.
This option provides the highest level of estate protection available at Fountaingate Gardens. [Average entrance fee with modified contract: $859,000].
How it works: Upon leaving your residence, either you or your estate will receive back 80% of the entrance fee paid, regardless of length of stay.
Advantages:
- Maximum estate preservation
- Substantial return on investment for heirs
- Peace of mind for asset protection
- Tax benefits may apply to portions of the entrance fee
How Contract Types Affect Your Entrance Fee
Your entrance fee amount depends on both the size of your residence and the type of contract you select. Fountaingate Gardens offers two primary contract options:
Life Care (Type A) Contract
The most comprehensive option, guaranteeing your monthly service fee will not change regardless of the healthcare services you receive—except for small yearly adjustments for inflation. This contract typically involves higher entrance fees but provides maximum predictability for future costs.
Modified (Type B) Contract
This option doesn’t require you to pre-pay for future healthcare services until or unless you need them. This contract pairs particularly well with long-term care insurance and typically involves lower entrance fees and monthly costs.
Special Considerations for Couples
One key advantage often overlooked: entrance fees do not double for couples. Here’s an example of how this works:
- First Person Entrance Fee (modified contract, traditional option): $465,000
- Second Person Fee (modified contract, traditional option): $27,300
- Total for Couple: $492,300
In this example, the second person only increases the entrance fee by 6%, making Life Plan Community living remarkably affordable for couples compared to two separate living arrangements.
The Proactive Choice: Insurance for Your Future
Choosing a Life Plan Community and paying an entrance fee is a proactive decision, much like purchasing home or car insurance. Like all insurance, you hope you never need to use all the benefits it provides, but it’s there just in case—giving you and your family peace of mind, assurance, and control.
Research shows that this proactive approach often makes more financial sense than trying to arrange care as needs arise, especially considering that at least 70% of people over age 65 will require some form of long-term care during their lifetime.
Understanding the Complete Value Proposition
Your entrance fee investment covers much more than just future healthcare access. It provides immediate lifestyle benefits including:
Comprehensive Monthly Service Package
- All utilities and maintenance (interior and exterior)
- Multiple dining options with chef-prepared meals
- Housekeeping services
- 24-hour security and emergency response
- Landscaping and grounds maintenance
- WiFi, cable, and trash removal
- Transportation services
Premium Amenities Access
- State-of-the-art fitness center and wellness programs
- Indoor saltwater pool
- Arts and cultural education programs
- Game rooms, library, and social spaces
- Spa and salon services
- Event rooms for gatherings and celebrations
Potential Tax Benefits
Many residents don’t realize that portions of their entrance fee may qualify for tax deductions, particularly the healthcare-related components. It’s advisable to consult with your tax advisor to understand how your entrance fee might benefit your overall tax situation.
Making the Right Choice for Your Future
When evaluating entrance fee options, consider these key factors:
Financial Priorities
- How important is estate preservation to you?
- Do you prefer lower upfront costs or maximum asset protection?
- How does each option fit with your overall financial plan?
Family Considerations
- What are your goals for inheritance?
- How will your choice affect your family’s financial future?
- Do you want to preserve maximum assets for heirs?
Risk Tolerance
- Are you comfortable with some uncertainty about refunds?
- Do you prefer guaranteed returns even with higher upfront costs?
- How does each option align with your risk management strategy?
Professional Guidance
The decision about entrance fee options is complex and should be made in consultation with your financial advisor, tax professional, and estate planning attorney. These experts can help you understand how different options align with your overall financial picture and long-term goals.
Your Next Step
The best way to determine your optimal entrance fee option is to work with our experienced team of Lifestyle Consultants. They will help you assess and customize everything about your move to Fountaingate Gardens, including:
- Residence size and location preferences
- Contract type selection (Life Care vs. Modified)
- Entrance fee refundability options
- Integration with your existing financial plans
- Coordination with insurance coverage
Our consultants understand that every family’s situation is unique, and they’re committed to helping you find the combination of options that provides the perfect balance of lifestyle, security, and financial comfort.
The best way to appreciate all the benefits of independent living at our Life Plan Community—and understand how your entrance fee investment translates into daily lifestyle advantages—is to visit our beautiful community.
Contact us to schedule your personal tour and consultation. Discover how your entrance fee investment can provide not just a new home, but a comprehensive lifestyle and healthcare security plan that serves you for life.
