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This is just food for thought for those considering a CCRC as a retirement option at some point.
One of the things that often is missed as folks consider their options is the mechanics of paying for it. Especially if there is a sizable buy in required.
Don't focus on the value of a CCRC but on the need to come up with a large sum of money in a economy that is currently unknown.
Yes you may have the equity in your house to pay for the buy in but will it be a great housing market that you can sell at will? Might you need a bridge loan to pay the buy in? Will the finance board at the CCRC lower your ability to be accepted as a result of the loan?
Yes you have the money in your retirement account to use if necessary but that will require a major tax hit as both principal and ROI will be taxed.
Cash do you have after tax money to pay for it?
Lots of questions!
I think the standard answer is going to be only a relatively affluent subset of the population will have the resources required to buy-in without depleting other necessary resources.
I think the standard answer is going to be only a relatively affluent subset of the population will have the resources required to buy-in without depleting other necessary resources.
Sure, whatever the big picture is has little relevancy to your individual need if your goal is to enter one
The CCRC that we are considering will allow us to pay 20% down with the balance due in 6 months which will hopefully give us time to sell our house.
Although this particular CCRC does not have bridge loans, I plan to check with a lending institution regarding that. I do not want to take money out of our IRA's.
It is my understanding that most people use the proceeds from the sale of their primary residence to pay the buy in costs.
Coordinating it all will be tricky. I know someone whose place became available much earlier than they expected and they were really rushed to get downsized and move in.
The CCRC that we are considering will allow us to pay 20% down with the balance due in 6 months which will hopefully give us time to sell our house.
Although this particular CCRC does not have bridge loans, I plan to check with a lending institution regarding that. I do not want to take money out of our IRA's.
It is my understanding that most people use the proceeds from the sale of their primary residence to pay the buy in costs.
Coordinating it all will be tricky. I know someone whose place became available much earlier than they expected and they were really rushed to get downsized and move in.
What do they base the entrance fee on, do you know?
What do they base the entrance fee on, do you know?
Difficult to say as different facilities in our local area seem to have wildly varying costs, both Buy-In and Monthly Fee costs. I don't see any correlation between size and cost when comparing different facilities. Within any one facility there is a direct correlation between size and cost.
In our case, if we go forward with a CCRC in another decade or so, I foresee it being a combination of equity from the sale of our current home, plus a portion of the Capital Growth Assets in our Retirement Plan. We will NOT liquidate any of the Income Assets in our Retirement Plan for a CCRC purchase.
If things go according to plan we and we entering a buy in based program we would use after tax dollars for the buy in fee and sell the house accordingly. Right now we are looking at a monthly fee structure with no buy in. That is our first choice and it eliminates the pressure to sell the house.
This is one of the reasons monthly fees are growing more popular.
By that time there will probably be newer and more flexible entrance structures.
The CCRC near me is supposed to be pretty good. Buy in costs are in the range of a half to a million. Monthly is roughly $10,000. I do not have the figures for a couple retiring there. I do know that you will not be accepted with major health issues.
The CCRC near me is supposed to be pretty good. Buy in costs are in the range of a half to a million. Monthly is roughly $10,000. I do not have the figures for a couple retiring there. I do know that you will not be accepted with major health issues.
Are you in Virginia or Raleigh?
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