Continuing Care Communities: A Big Investment With Catches

The vacancy rate in Continuing Care Communities are higher than usual due to our current economic climate. CCRC’s can provide all levels of care for seniors in retirement, from independent living to assisted living to nursing home care. Such a set up can be beneficial particularly for spouses in which one suffers from dementia and requires nursing home care, while the other can live on the same campus in an apartment. It is a very big investment, and everyone should investigate such an arrangement thoroughly before making a commitment. To learn how a South Florida Geriatric Care Manager can assist you and your aging loved one with everything from senior housing to in-home care, visit us at Advocare serves the South Florida areas of Boca Raton, Boynton Beach, Delray Beach, Palm Beach, Miami and Fort Lauderdale.

Continuing Care Communities: A Big Investment With Catches

Are you (or your aging parent) the kind of person who likes to plan for all contingencies? Then you might want to consider a continuing care retirement community–a development that usually includes independent apartments or town homes for spry seniors; assisted living units for those who need some help; plus a nursing home.

Making any retirement move in the current real estate market takes careful thought, of course. But a CCRC requires extra diligence, since typically it requires a large upfront payment (averaging a quarter-million dollars) that may not be easily or fully refundable, plus high continuing monthly rents. “You need to approach these communities as an investment,” says Bernard Krooks, an elder care lawyer in New York City and a Forbes contributor.

The average CCRC vacancy rate is 11%, up from 10% last year and 6% in 2005. So provided you’re healthy, you should have your choice of CCRCs–if you can afford one. Why the high vacancy rates? Most residents use the proceeds from selling their homes to pay for the entrance fee, and the weak housing market has would-be residents hesitant to put their homes on the market. In some cases, folks who were relying on the equity in their homes to fund the entrance fee can no longer afford it. To drum up business, some communities are offering incentives to new residents: move in with no money down and pay the entrance fee six months or even a year later (when you’ve presumably sold your home); free rent for the first three months; or help with moving.

There are nearly 2,000 CCRCs in the U.S. today with more than 600,000 residents, most of them living independently. In some developments your buy-in fee funds care should you need it. In others, you pay less upfront but are guaranteeing yourself access to care–trained assistants or a nursing home bed, but not pre-paying any of the costs. (A small number of rental CCRCs have no entrance fee, and all services are pay-as-you-go. Plus, while nursing and assisted living beds are available in the complex, you’re not guaranteed one.).

In any case, generally you can only get into a CCRC when you’re still able to live on your own. That means you’ll have to pass a health check, just as if you were buying life insurance. You’ll also have to pass a financial screen to make sure you won’t run out of money paying the monthly fee.

Those who move into CCRCs are “thinking ahead,” says Robert Kramer, president of the National Investment Center for the Seniors Housing & Care Industry. “They want to choose a community ahead of time rather than having limited choices when a health crisis hits,” he adds. There are other marketing draws too. For example, more than 50 of these complexes have been built close to or in conjunction with colleges or universities, including Stanford, Penn State and Dartmouth and offer lectures or classes or access to a university hospital. Others offer pools and posh recreational facilities.

Still, these communities usually don’t attract the youngest retirees–the average age of a new resident is 80. And some new residents move in reluctantly, dragged along by a “planner” spouse.

Continue reading from…

Comments are closed.