Wealthier Americans are paying millions to age in luxury campuses

Spending later years at this community, Vi at Palo Alto, comes with a price tag that starts with an upfront payment that can range from $1.17 million for a one-bedroom apartment and up to $7.3 million for a three-bedroom unit. Ongoing monthly fees up to $13,800 cover services such as housekeeping and valet parking, and amenities. Residents can attend lectures by professors of nearby Stanford University or a performance by opera singers.

For wealthier Americans, greater options exist for how to spend their later years. A growing crop of high-end communities, called life plan communities, allow residents to start in an apartment and then move to more nursing-like care as they age. Occupancy rates are rising, with the rate in the independent living units above 80% today, according to NIC MAP Vision, a data source for senior housing research.

Resident contracts typically work like a membership and, depending on terms, lock in rates so that costs don’t escalate when higher levels of care are needed. Inclusive care contracts come with higher upfront fees, but allow customers to sidestep having to find, and pay for, different levels of care as they age.

Many baby boomers who watched parents or friends struggle to age in their homes—and scramble to find nursing or home healthcare—say they are determined to do things differently, for their own peace of mind and that of their children.

“It’s a gift to our kids," says Virginia Pollard, who lives with her husband, David, at Vi at Palo Alto.

Finding the right life plan or continuing care retirement community is like looking at colleges, say residents. The ideal is a place that feels personally comfortable, whether in the city or country, and where they can be among others with similar accomplishments and interests.

Kendal Corp. has life care communities near Oberlin College in Ohio and Cornell University in Ithaca, N.Y. The Forest at Duke neighbors Duke University. Like colleges, they often have wait lists.

Ron Litvak, 66, a retired lawyer in Denver, says he and his wife are on two wait lists, one for a premier life planning community in Denver and another for La Costa Glen in Carlsbad, Calif., and plans to get units in each.

Litvak saw his own parents grow isolated in their 17-story Denver condominium, his dad, with Parkinson’s, and his mom, with emphysema. Litvak brought them groceries and managed their care as their needs increased.

“I don’t want my kids to do that," he says, adding that he thinks people live better and longer if they have a good social network.

“If we could get ourselves into a community at a time when we are able to enjoy it and make new friends, I think it will make for a better existence for both of us," he says.

Nursing boost

Entrance fees for life plan communities, which have both independent living and nursing care on one campus, average between $100,000 and $400,000 and can go as high as $7 million, according to industry surveys. The upfront fees can be partially refundable depending on the contract and often reflect the local real-estate market.

“You’re not going to find a $6 million entry fee in the middle of Iowa," says Lisa McCracken, head of research and analytics for the nonprofit National Investment Center for Senior Housing & Care, which tracks the estimated 1,900 life plan communities. Most are located in larger metropolitan areas. Some, such as Willow Valley Communities in Lancaster, Pa., are in smaller cities.

Monthly fees average about $4,800 and are subject to annual increases that have historically averaged about 3% to 4% in the last decade, but have been higher in recent years, according to NIC MAP Vision.

Some communities offer a rental option, with no upfront fee, or have lower entry fees but charge more for nursing care. Others are adding an at-home option, with members paying a one-time membership fee that can range from $50,000 to $140,000 depending on age and coverage terms. There are also monthly fees of $400 to $700 for care and services at home.

The Pollards intended to age in their home on Stanford University’s campus, where David taught. They added space for a live-in caregiver.

That changed when they began seeing friends become isolated as they grew frail, says David, a professor emeritus of earth sciences. One acquaintance died after falling from a roof while doing home repairs. The couple always shared tasks around the house and realized, says Virginia, that if one got hurt or became ill, the other would have to do everything.

“We saw a whole lot of problems coming our way," says David.

His own parents lived in their Napa Valley home a few hours away, and relied on private duty aides. If a caregiver didn’t show up, they would call David for help.

In 2019, the Pollards moved into a two-bedroom apartment at Vi at Palo Alto, one of 10 high-end Vi life plan communities in the U.S. Their inclusive care contract offers access to higher levels of care with little to no increase in monthly fees. Monthly fees are about $12,000, says David.

They swim at the aquatic center, attend fitness classes and weekly lectures and serve on various resident councils. David said he marvels at active fellow residents 15 and 20 years older, who have become role models.

“We both know we made the right decision," says Virginia.

Money math

Many life plan communities have waiting lists of about two years, but can stretch to five years or longer, says Tripp Higgins, president of myLifeSite, an education resource for older adults. Longer wait lists can be hard on consumers but benefit life plan communities, which can fill vacancies quickly.

“They rely on a long wait list to maintain high occupancy levels," says Higgins.

Jane McCaffrey, 83, figures she saved money by moving into Meadow Ridge, a 136-acre life plan community in Redding, Conn.

She and her late husband sold their 10,000-square-foot house and moved into a two-bedroom apartment in 2017. The entry fee then was $750,000, of which 80% is refundable to her or her estate.

Her $9,000 monthly fee covers food, transportation to medical appointments, utilities, housekeeping and access to all programs. She no longer pays real estate taxes.

“I would be paying more if I lived in my very big house,’ says McCaffrey, a retired CPA, who is on several resident committees. Under her life care contract, the monthly fee will remain comparable if she eventually needs skilled care. “I’m here until I die."

Write to Clare Ansberry at clare.ansberry@wsj.com