For many, retirement is a goal in life – something to plan for with joyful anticipation. If preparing for retirement is a happy part of getting older, then why are some so resistant to planning for where they want to live out their final days? Planning for retirement might mean a move across the county to be closer to family. For others, it might mean spending the money to make accommodations to an existing residence. For others, it might mean downsizing to a single bedroom apartment in an assisted living community. Regardless, making plans to choose where want to live is hard. It can be even harder if where you want to live doesn’t meet your needs anymore. There is no guidebook or “right” way to think about, plan for and execute a move.
Most people resist the thought of proactively moving, even if there are indications that a move will improve their health or quality of life. The growth and success of Continuing Care Retirement Communities (CCRC) are changing the conversation about housing, placement and living arrangements as people age.
What is a CCRC?
CCRCs are communities of senior residents that are usually situated on one campus. They are structured (both literally and figuratively) to offer a variety of housing options, and a continuum of care for people over time. Independent living, assisted living, memory care, health care and hospice services are all built into the CCRC model.
The idea that you can downsize to a lovely 1, 2 or 3 bedroom apartment, add in additional caregiving services as you need them, and eventually move into a setting that provides more hands on assistance all in one setting is appealing. There is an added bonus that by moving within the community, you can build relationships with the staff. People know you, your pets, and your family! This is incredibly attractive to people, especially those who always imagined that they would live out their final days alone, in the home where they have resided for decades.
Downsides?
What’s the catch? Among some concerns, CCRCs can be expensive. The average entrance fee may be more than the value of your existing home. On average the entrance fee of a CCRC is between $400,000 to $500,000, and in some places the entrance fee may exceed $1,000,000. The upfront cost of a CCRC can be used to support the maintenance and the operations of the CCRC, or to support other residents. On top of an entrance fee, there can be monthly costs for rent, which does not include the cost of a private caregiver.
Even if you have the money to spent, the contract for a CCRC requires careful review and consideration. Sometimes the entrance fee or a portion of it is refundable. Other times a CCRC may offer entrance fee that is structured around a fee-for service based contract. What happens to all the money a resident pays to play at a CCRC? It depends on the law of the state where the CCRC is and what the CCRC contract states.
As the interest in CCRCs grows, so does the concern. What happens if someone uses all of their life savings to get into a CCRC that goes bankrupt? This is a scary thought to contemplate.
It can also be difficult to find a CCRC with a culture and setting that is the right fit. Each community is different. They are run by different staff, have different programs, serve different foods, and meet different needs. In the U.S. there are over 2,000 CCRCs. There are over 30 in Arizona. It can be overwhelming to explore all of the options. It is important that you find the right fit though. Depending on the contract you sign and your level of capacity, it may be difficult to leave. Many of these facilities offer tours for potential residents and may even let you stay for a meal.
So, now what?
CCRCs can be a good option for many who are ready to plan for their care as they get older. But, it is important that you know what you are signing up for and take the time to find a good fit. The cost is high and the contracts can be long. Be unafraid to ask questions about what happens to your deposit when you die? Or, what happens if you want to move out? It’s a big investment! If you’re not sure about something, ask. And don’t be afraid to have a lawyer review the contract before you sign it.
One Response
I reviewed a contract last year for a new facility in Pima County (for a client.) Aside from the sticker shock, I had significant concerns about the reality of the continuum. The contract guaranteed no higher level of care services when the resident might need them. Instead, it offered a place on a list. The facility wants to maximize its occupancy at all levels on the continuum, but if the nursing level care facility is running at 95%, a resident gets nothing when they might need it. For most or all of a couple’s net worth, they should expect more.