While many people over 65 are seriously concerned about how they are going to make ends meet in retirement, another large group of retirees is looking for nothing less than a luxury retirement. Hundreds of thousands of older Americans are extremely well off in their own right. Many others, who have so far only been rich only on paper, will soon join them, once they realize $1 million or more from selling their homes. The spending power of this segment makes it easy to see why luxury retirement communities are springing up all over the country.
The most elaborate retirement facilities are typically in close proximity to large urban or affluent areas. Companies stepping into the market include Varenna from Aegis Living, Classic Residences by Hyatt, Sunrise Senior Living, the Esplanade Senior Living Residences (in the New York area), Hallie Management, and the Valencia Brand from G.L. Homes
Understanding the difference between a retirement home and a luxury retirement village is easy. In the new high end facilities for seniors, chefs from the Culinary Institute of America might be preparing foods to order. Chauffeurs drive residents to their errands. Recreational opportunities include touches like indoor driving ranges. Every type of pampering is available at the drop of a hat. Concierge medical practices provide personal medical attention. Apartments are much larger, sometimes 3 bedrooms with multiple bathrooms. Indoor swimming pools and spas abound. Fox Hill (Bethesda, Maryland) has a 200-seat performing arts center and a recording studio. And of course, the entry fees and service charges are high enough to match. At the Classic Residence by Hyatt at Palo Alto (CA), one of the most famous luxury senior communities where residents can take classes at nearby Stanford, entrance fees can range from $600,000 to $4 million. The Clare at Water Tower, located in downtown Chicago, has entry fees up to $1.3 million. Many other luxury communities compete with entry fees exceeding half a million dollars.
So far it appears that an older crowd is attracted to this type of facility, whereas the younger, baby boomer set is gravitating toward active adult communities. The difference is that most of the luxury retirement communities are CCRC’s. Although Continuing Care Retirement Communities are almost always one of the most expensive retirement options available, their assurance of long term health care answers the greatest concern of most older Americans. Active adult communities attract younger folks who are not yet worried about the health care issues that will come as they move into their 70’s and 80’s. Instead they tend to focus on the golf and other activities that await them after their working careers come to an end.
The question that many have about these ritzy retirement communities is – with all that money, why not live in your current home and hire lots of staff to help? The issue frequently comes down to health care, sociability, and lifestyle. Life is easier in a retirement community – your health care needs will be met. Friends and entertainment are plentiful. And just about any service is available at the drop of a hat.
References: Los Angeles Times article - Paying in Gold for the Retirement Years
Forbes: Ritzy Retirement Communities