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Read the Fine Print on Continuing Care Retirement Community Agreements

The photos are great: healthy seniors enjoying active lifestyles, playing tennis, chatting in the pool and dining in an upscale restaurant. However, review the documents with care before signing up.

The concept of continuing care retirement communities, or CCRCs, is an excellent one. Moving into such a facility assures retirees and their children that they’ll be able to transition from the different stages of later years in one location, with a trusted organization providing the care they’ll need. When it works, it’s great. However, before making such a big financial and emotional commitment, understand how the fee structure works, and what the risks may be.

CNBC’s recent article, “Do your homework before moving into a retirement community,” explains that retirees can frequently pay more than $100,000 as an initial deposit and signing on for additional monthly payments that may change over time, as their need for care increases.
Consider the following, before you decide to live in a continuing care retirement community:

Check out the amenities. The high-demand amenities include fitness centers on-site and multiple dining venues, with cafes and bistros. However, you should also look at their assisted living and nursing care departments before deciding.

Find out about the occupancy level. Lower than 90% occupancy could suggest an issue with being able to fill certain units with new residents. The inability to maintain a high occupancy level could be a sign of problems.

Examine the details and work through them with your accountant. This includes the key financial reports from your continuing care center, such as its audited financial statements, data on monthly service fee increases, financial ratios and reserves.

Ask for a look at their financials. When continuing care centers have financial troubles, there’s no guarantee that a resident will get his or her money back. It’s common in that case for another provider to buy out a struggling facility. That may result in a change in services and fees.

CCRCs are regulated by the states where they’re located. Therefore, the level to which regulators scrutinize these communities will vary. Prospective residents should contact the state agency that oversees CCRCs.

Make sure that you have a clear understanding of what the monthly fee includes and what additional services, like shopping or in-room dining, costs. You’ll want to know how what the additional charges will be if and when you need to move to another facility on the campus for more services, including skilled nursing care.

Reference: CNBC (July 8, 2018) “Do your homework before moving into a retirement community”

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