Is a Retirement Community Right for You?

Picture of High rise buildings on water

When you move into the Autumn of life you may come to a point in time when you need to ask yourself the question, is a continuing care retirement community (CCRC) right for me? A continuing care retirement community is a senior community where residents move between levels of care as they age. This means residents start living independently in their own apartment while taking advantage of the various recreational, dining, social and educational opportunities the community has to offer. As the aging process creates a need for more care, residents will transfer to assisted living and ultimately to skilled nursing or memory support.

Financial Considerations

Many seniors find it appealing to settle into a community that guarantees a lifelong place to live, even as their care requirements change. There are several things you need to consider to determine if this type of living situation is right for you before making the decision. The first thing to consider is cost. Costs vary based on the amount of care provided, the size of the unit and geographic location. CCRCs can be very pricey, costing more than individuals with moderate income or assets can afford. For example, entry fees can range from $30,000 to upwards of $1 million and monthly charges can run between $300 and $5,000. Seniors often use proceeds from selling their home to pay for a CCRC, but there could be adverse tax consequences.  The IRS doesn’t permit people to take gains from selling their home and roll them directly into a CCRC unit. Medicaid eligibility is another consideration. Residents typically put their entry fees in an escrow account, which used to be excluded from their countable assets for Medicaid eligibility purposes. But since 2006, these are considered countable resources if, among other things, the fee is refundable should the resident die or leave the community or if the entrance fee does not confer an ownership interest. Because of fine print like this and complicated fee structures that differ between CCRCs, it’s a good idea to review your contract with an elder law attorney before signing.

Understand Access to Amenities

Another thing to consider is whether the CCRC has policies that deny residents access to certain amenities or activities or segregates residents altogether when they move to a higher level of care. You should ask for a copy of the CCRC’s policies before signing a contract. There have been examples CCRC’s executing policies to the detriment of the residents. One example involved a person being banned from bingo games when she moved to her facility’s nursing unit while rehabbing from back surgery, even though she easily could have attended the games with a motorized scooter. Another example found a CCRC, abruptly declaring a popular waterfront dining room off-limits to those in assisted living and nursing units, resulting in longtime friends, and even married couples not being able to eat together. Media attention brought about policy reversals in both cases, and some believe that these policies violate the Americans with Disabilities Act. When visiting, be sure to ask questions of current residents regarding quality of care (are there enough care providers to assist you in a timely manner to address your needs) and are they happy with the policies, environment, and the staff.

Seek Professional Advice Before Contracting with a CCRC

Before contracting with a CCRC be sure to consult with your financial advisor and an elder attorney that can help you understand the financial and contractual implications of the agreement. Your financial advisor can advise you of the contract’s impact on your financial plan and an elder attorney can review the fine print of the agreement to insure you fully understand what you are signing up for and help you avoid certain pitfalls.

I hope this blog post has been helpful.  I am available to help you with all your elder law needs.