Retirement Communities - What's The Appeal?

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If you are retired, or soon to be, selling your home may be a consideration. But before you downsize to a smaller home, check out Continuing Care Retirement Communities. They have a big advantage other housing can't match!

The Big Advantage

Continuing Care Retirement Communities (CCRCs), or life care communities, are facilities that provide independent living, assisted living, and nursing home facilities on one campus. The big plus is that as you need more assistance, you are guaranteed to receive it without the inconvenience and disruption of moving to a new facility. You can make the move from independent housing to an on-campus nursing home without giving up the friends and surroundings you are familiar with.

You can proactively select your living arrangements now and for the future rather than having someone else make that decision when you become ill or incapacitated. Independent living areas usually feature single-family homes or condos - with no-maintenance living. And, you typically can keep your own car!  You may not even realize you’re on a CCRC campus.

Amenities vary greatly among facilities, but common dining areas, activity centers, housekeeping, and transportation are generally available. In addition, most feature a plethora of social and educational events and outings.

Investigate Thoroughly

There are many CCRCs to choose from, all with their own appeal and set of amenities. As of late 2017, the Indiana Securities Division listed 54 registered CCRCs in Indiana. After researching which CCRCs to visit, make a list of questions to ask each facility's representative as you tour the campus. Moving is a big change and it's important to understand how it will impact your life now and in the future. Be sure to include these questions:

  • What if you commit, but change your mind?
  • What happens if one spouse needs a higher level of care or passes away?
  • What if you outlive your financial resources?
  • Will your estate receive any benefits after you pass?
  • What is the occupancy rate? Is there a waiting list?
  • What is the overall financial health of the CCRC?

Don't just talk to the facility representative. Residents are a wonderful resource for providing insight into the facility. Some facilities allow you to stay overnight or for a short period of time to get a better feel for the community. If you can't stay on campus, visit multiple times at different times of the day. Don't forget to visit the assisted living and nursing care units as well. You may not need that level of care now, but you may later.

The CCRCs ombudsman can also be an invaluable resource. His or her role is to advocate for residents in the event a complaint or regulatory violation occurs. Ask the ombudsman what issues he or she has dealt with at the facility. You can also ask the CCRC representative for inspection and licensing reports as well as complaint investigations. Don’t be bashful about asking! It’s better to know these things prior to moving!

Financial Considerations

CCRCs do come with some sticker shock. You'll pay both an entrance fee and monthly fees. Think of the entrance fee as prepayment for the housing, services, and healthcare you’ll receive over the duration of your stay. The entrance fee may be as low as $100,000 or as high as

$750,000. Monthly fees typically range from $2,000 to $5,000. You'll need to determine whether you can afford the hefty price for the convenience and peace of mind a CCRC offers.

Signing on the Dotted Line

Of course, you'll be required to sign a contract. CCRCs typically offer three types:

  • Life Care or Extended Contracts: This is the most expensive option because it typically provides unlimited assisted living and healthcare services with little to no additional fees.
  • Modified Contract: This contact provides you with specific services based on frequency or a set length of time. For example, some medical services will be included in the monthly fees. Once you’ve exceeded the limit, you will pay out-of-pocket for additional services.
  • Fee-for-Service Contract: Entrance fees for this contract are lower than the life care or modified contracts, but you’ll pay market rates for assisted living and skilled nursing care when you need it.

Summary

There is a lot to consider when searching for a retirement facility that will meet your needs personally, medically and financially. Proactively research the options while you are healthy and have the time and energy to do so. You’ll be glad you did. And your loved ones will thank you!

Sarah Mahaffa, CFP is a Senior Wealth Advisor with Bedel Financial Consulting Inc., a wealth management firm located in Indianapolis. For more information, visit their website at bedelfinancial.com or email Sarah.

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