Mar 21, 2025
There are a lot of upsides to living in a retirement community: social and recreational activities, amenities and best of all, someone to take care of maintenance.
It can be a liberating experience, freeing you up to do what you love with the people you love — like your grandkids. The downside? Sticker shock.
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According to the AARP, the average Continuous Care Retirement Community (CCRC) charges an entry fee of $402,000, in addition to monthly fees for maintenance and services. Buying into a 55-plus community is an equally big financial commitment.
If you’re looking for an affordable alternative, a senior co-op could be a good option. But before you commit, it’s a good idea to consider the pros and cons.
The upside of senior co-ops
Dennis Johnson, president of Cooperative Housing Resources has seen the growth of senior co-ops across the U.S. since they originated in Minnesota in the 1970s.
He told MPR News that most people move into senior co-ops because of convenient location and worry-free maintenance.
“After they've been there a while, you ask them what they like most about the cooperative and number one is the people, and number two is the activities,” he said. “They live very active lives.”
When you buy a place in a senior co-op, you’re actually buying a share in the corporation that holds a master mortgage on the entire complex.
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That means you own equity that you get back when you sell, along with appreciation — unlike a CCRC or life plan community where you rent and do not own your unit.
Generally, senior co-ops are run as limited-equity cooperatives, with limits on selling prices. That keeps them relatively affordable to purchase.
You still have to pay monthly fees for a senior co-op, which Johnson said average around $3,000 a month for a 1,500 square foot unit. But while that might sound like a lot, the monthly fees not only cover operating expenses and your share of the mortgage payment but tax deductible mortgage interest and property taxes as well.
That’s not the case with a condo, where you may not only pay monthly HOA fees but property taxes, mortgage payments and interest as well.
Meanwhile, the average monthly rent for a Continuing Care Retirement Centre was $3,862 in 2023, according to data from the National Investment Center for Seniors Housing & Care.
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The downsides of senior co-ops
Because there are limits on selling prices in senior co-ops, owners don’t tend to build significant home equity. If that’s a priority, you might consider buying a home in a 55-plus community, which could later be sold at market value.
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Another consideration is how much care you need as you grow older. Senior co-ops offer housekeeping, meals and transportation, but are generally for residents still living independently.
CCRCs or life plan communities offer more robust health care options so residents can age in place.
Co-operative housing by its very nature involves a strong sense of community, shared responsibility and decision-making. That level of involvement is not to everyone’s taste.
Finally, the waiting lists for senior co-ops are long — just as they are for all retirement communities.
The good news is you are clearly thinking long-term about optimizing your life and your finances so you can spend time with the people who matter to you most.
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Laura Boast is an Associate Editor with Moneywise.com and a lifelong content creator who's worked for Discovery, CBC, Blue Ant Media and Bond Brand Loyalty among other organizations. She’s covered everything from consumer affairs to comets, chimps and cars. She’s obsessed with home design shows.
