Our neighbors, all in their 70s and older, are on the waiting list for Frasier Retirement Community in Boulder. There are about 800 people on the waiting list. And we have several neighbors in the same situation.

Take a closer look at the numbers.

The cheapest option is a one-bedroom apartment: Entry fee: $457,633. Monthly fee: $6,886 (includes food, housekeeping, utilities, and entertainment). — Second person: an additional $1,875 per month.

OMG Fees

For a couple, that comes to roughly $570,000 upfront + $8,761 every month.

And the entry fee does not mean you are buying the apartment. You don’t own the property. There are different contract options: the fee can be non-refundable, in which case it is lower, or a portion of it, say, 50%, can be returned to you or your heirs later.

And this does not mean healthcare is free. Doctors, medications, hospitalization, lab tests, and other medical expenses still require Medicare, insurance, or out-of-pocket payment.

Chasing Rainbows

I assume the economics work something like this for many Americans: sell the home they’ve lived in for 30–40 years, take advantage of the substantial appreciation in its value, and turn that accumulated equity into the next 15–20 years of comfortable living and care.

But what happens if the money runs out before the end of your life? And Frasier is far from the most expensive option in Boulder.

At the new Academy Boulder community, the entry fee starts at around $960,000 and goes up to $2.7 million+.

I look at these numbers and still don’t quite understand the economics of this business.

On the one hand, a huge entry fee, $100,000 a year in ongoing payments, and healthcare on top of that.

On the other hand, 800+ people on the waiting list.

The population is aging. Which means demand for these services is likely to keep growing for decades to come.  Let readers know what you think

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