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Hi TuborgP, based upon my very limited research (since I am still very far away from moving into a CCRC) my understanding was that with the buy in you were pretty much guaranteeing care even if you ran out of money, and you were limiting the annual rental increases. With the annual lease and paying monthly model I'm wondering how high annual increases in monthly charges will be and whether you are forfeiting the guarantee of continued care even if you are unable to pay in full or in part.
You need to have strong enough finances beforehand and a solid margin of error. Many of residents are woman without a spouse and the finances to pull it off. If you leave you lose your space in nursing etc. They are best afforded with fixed income streams well in excess of the monthly fee and sizable liquid reserves. They have identified a targeted market and are structured accordingly. One of the giveaways is often the meal plan. They often are designed under the assumption you will be traveling and not there all the time.
Hi TuborgP, based upon my very limited research (since I am still very far away from moving into a CCRC) my understanding was that with the buy in you were pretty much guaranteeing care even if you ran out of money, and you were limiting the annual rental increases. With the annual lease and paying monthly model I'm wondering how high annual increases in monthly charges will be and whether you are forfeiting the guarantee of continued care even if you are unable to pay in full or in part.
Looking
You raise a good point and one of the discussions being had in and out of the CCRC business is a given model changing. One of the main issues is life expectancy changing as in them "charming old basterds" are living longer and costing us more thus the economic model we built this business on no longer works. What are we to do?????
You raise a good point and one of the discussions being had in and out of the CCRC business is a given model changing. One of the main issues is life expectancy changing as in them "charming old basterds" are living longer and costing us more thus the economic model we built this business on no longer works. What are we to do?????
In addition their return on investment in this low rate environment isn't what a ten year old model says it should be. What are we to do? That is a crisis in the making and as with other things the outcome could well drive average life expectancy down for some groups as is already happening.
Hi TuborgP, based upon my very limited research (since I am still very far away from moving into a CCRC) my understanding was that with the buy in you were pretty much guaranteeing care even if you ran out of money, and you were limiting the annual rental increases. With the annual lease and paying monthly model I'm wondering how high annual increases in monthly charges will be and whether you are forfeiting the guarantee of continued care even if you are unable to pay in full or in part.
With the CCRCs I've seen - there aren't any guarantees. You have to pay monthly fees. Which may vary depending on the level of care you need - and which can go up over time as prices of various things (like food) go up. The main selling point of CCRCs - as opposed to other senior living places - is they offer continuity of care if you need a higher level of care than independent living (which is what you get when you first move in). IOW - "one stop shopping".
The problem with the traditional model is people are simply living too long these days. Longer than they were supposed to live. I have always wondered what will happen with the CCRC down the road from us as residents wind up living too long. Because there are about 250 apartments - and about 15 SNF Medicare beds. What happens if all the SNF beds are full and person 16 needs one (even on a temporary basis after - for example - an operation)?
Note that 2 of the 4 large CCRCs I know about in this area have gone through bankruptcy in the past. One (the latest to go through bankruptcy) has in part abandoned its original model. Instead of paying up-front fees and getting some kind of assurance that you'll get ALF/SNF care if/when you need it - the place is renting some of its independent living units - with no promise of anything in the future. This might actually be a good deal if you like the place - want to live there - don't care about future care requirements - and don't want to pay fees up front. But it is certainly a different model than the place had when it opened.
Of these 4 places - only 1 (which is operated by a large not-so-highly-regarded for-profit corporation) accepts Medicaid in its SNF. So - if you ran out of money in the other 3 and had to rely on Medicaid for SNF care - you'd be out of luck. Robyn
In addition their return on investment in this low rate environment isn't what a ten year old model says it should be. What are we to do? That is a crisis in the making and as with other things the outcome could well drive average life expectancy down for some groups as is already happening.
Three of the four large CCRCs here are operated by non-profit corporations (the fourth is a public for-profit). The non-profits don't do a lot of investing (except for their cash reserves). But they do borrow money. E.g.
So one would expect that this low interest rate environment would be a positive for them - not a negative. OTOH - one wonders what impact the current/future investment environment might have on their residents. Note that one of the CCRCs here - Fleet Landing - caters to retired military - especially retired naval officers. I assume retired naval officers have pretty good pensions - so the Fleet Landing residents might be more stable financially than the residents of other CCRCs. Robyn
Robyn's comment about Medicaid beds in CCRC's is verrrrrrrrrrrrrrrrrry important. They don't want Medicaid clients and have figured work arounds to avoid getting them. The financial review when you get in is very important as is LTC or a boat load of cash/income. This is something that probably needs to be factored in to retirement prior to actually doing so. What you can afford at 66 might not be reflect your needs at 80. CCRC's are also not attracting many if any retirees in their 60's or early 70's and when your average entry age is close to 80 you aren't going to. Marketing and reality are very different. Look at the brochures and then go to their Facebook page or actual life at pages especially social events
That seems to be the problem with trying to plan for a future 20 to 30 years in advance. So much changes in that time. I have the inflation-adjusted LTC insurance with no lifetime cap, I have money set aside for retirement purposes, I will have a small pension, Social Security and an annuity. My CFP tells me that all of my holes are plugged and that I am in a good situation, and yet things change and new holes open. It is a constant battle to figure out what to do when I am aged while the ground keeps shifting.
If it is a state partnership plan things can change in the perks if you move out of state. Our total asset protection coverage and income protection vanishes and the plan reverts to a dollar for a dollar protection
That is correct for 3 of the 44 states that have Partnership Programs: NY, IN, and CA.
NY and IN are the only states that offer Total Asset Protection. So, if you move from NY or IN and don't move back, then you won't get Total Asset Protection, only "dollar for dollar" asset protection.
CA does not honor any other state's Partnership Programs.
So, if you move into California they won't honor your state's Partnership Program.
If you move out of California, no other state will honor California's Partnership Program.
Interesting that ny is one of the few states that offer this. In some regards ny has some nice retirement perks. While some states have no estate taxes ny is pretty good going to 4 million in april can pass tax free
Interesting that ny is one of the few states that offer this. In some regards ny has some nice retirement perks. While some states have no estate taxes ny is pretty good going to 4 million in april can pass tax free
Unless Deblassio becomes gov
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