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Is a 55+ Community Right for You?

Learn the pros and cons of active adult retirement communities.

Older smiling couple standing outside a 55+ community home.
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Aging experts say you need a plan for retirement. That means ensuring you’re financially prepared for expenses in retirement, but it also involves a gameplan for how you’ll spend your time, make new friends and stay active in your golden years. For some people, the solution starts with a 55+ community. Is that part of your retirement solution? Let’s find out.

What’s a 55+ community (and what’s not)?

In 1960, Sun City, Arizona opened, ushering in a new concept. This self-sustaining, age-restricted community for retirees provided amenities like golf, swimming and shopping all within its own town boundaries. A hospital was soon added so Sun City residents had convenient access to healthcare.

Today, 55+ communities are located all over the country. Some like Sun City are their own towns. Others are built in or near major U.S. cities in close proximity to shopping, dining and medical facilities that complement a 55+ community’s on-site, resort-like amenities.

As the name suggests, there must be at least one person over 55 living in each of the 55+ community’s residences, which can be single-family homes, townhomes or condominiums. Developers market them as independent senior living or active adult retirement communities.

Such marketing differentiates them from assisted living communities in which residents live in apartment-style housing and have access to on-site medical staff and help for things like bathing and dressing. There is usually an adjacent nursing home with memory care so residents can age in place. These features aren’t typically included in 55+ communities unless a developer combines the concepts.

The attraction of 55+ communities

Since 1960, the 55+ concept has gained momentum. People are drawn to them for many reasons:

  • Smaller homes: The two- to three-bedroom homes built in such communities appeal to anyone over 55 who wants to downsize.
  • Lower mortgages: A smaller residence likely means a smaller mortgage payment.
  • Lots of amenities: These often include dining, a golf course, swimming pool and fitness center, along with sports courts (tennis, pickleball, etc.), dog parks and walking and biking trails.
  • Social calendar and director: To help residents meet others and make new friends, many 55+ communities have an activities director and a full schedule of monthly social events, including classes (exercise, yoga, art, etc.).
  • Other people your age: Although not everyone may be retired, all residents are relatively close in age and likely interested in finding ways to stay healthy and active in mind and body.
  • Covered maintenance and expenses: Collected homeowners association (HOA) fees cover exterior maintenance and landscaping for all residences and shared spaces like a clubhouse. Some also cover utilities, limiting the number of monthly bills you’d need to worry about paying.
  • Convenient locations: These communities are generally built within walking distance of additional amenities like shopping centers, restaurants and healthcare facilities.
  • Safety and security: Many are gated and some include their own security personnel who patrol the grounds to ensure resident safety.
  • Transportation: Regularly scheduled transport is sometimes available to grocery stores, medical centers and other commonly used facilities as well as for special events, such as theater performances.

The potential downsides of 55+ communities

For all their attractiveness, 55+ communities aren’t for everyone. Before you buy a home in one, it’s important to understand the potential cons:  

  • Capital fee: You may be required to pay a non-refundable capital fee on top of your home’s purchase price. This money helps the community enhance or add to its facilities as needed, which may or may not personally benefit you despite the upfront financial commitment.
  • Higher monthly expenses: In some cases, 55+ community HOA fees run pretty high, which could offset any savings you’re anticipating from a lower mortgage payment.
  • HOA regulations: You’re subject to the community’s rules, which can be extensive and might limit your lifestyle in ways you don’t like. For example, some communities have strict visitor rules that limit if or when young children, such as your grandkids, can visit and for how long.
  • Less control over your external surroundings: It’s nice not to worry about mowing your grass, but if you like gardening, you may not be able to continue that hobby. Likewise, don’t anticipate having a say in the landscaping of your yard.
  • Limited privacy: Even with single family homes, they’re built very close to each other to foster social interaction. If you’re not seeking such closeness, it may be overwhelming or annoying.
  • No other age groups: If you enjoy watching neighborhood children playing or interacting with people in earlier phases of life, you won’t find that in a 55+ community.
  • Limited pool of buyers: The age restriction automatically reduces the number of potential buyers when selling a home in a 55+ community.

If the pros appeal to you and the cons don’t turn you off from the 55+ concept, explore communities in your area, asking some key questions:

  • What are the monthly HOA dues and what do they cover?
  • Who manages the HOA and what’s their record for sound financial management?
  • Could you be subject to additional capital fee assessments or higher HOA fees in the future?
  • What are the HOA rules?

Finally, take some 55+ tours to see the amenities first-hand and to meet residents and ask about their experience with the concept in general and the community in particular.

Looking for a savings option that lets you lock in a high APY? Check out our top-of-market term savings accounts (similar to CDs).

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CUNA 2023 diamond award trophy icon

CUNA 2023 Diamond Award Winner

Financial Education

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