Money in the Middle

Sandwich Generation Talking About Money Up, Down and Across Generations

Continuing Care Communities Require Extra Financial Look

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Continuing care communities hold the promise of being a place where you can stay…as you age…and get the care you need.  Start in independent living and move through the phases (assisted, nursing home) if and when you need to. 

Financially they can also be a way of –hopefully – capping some of the catastrophic costs of aging.  And they can be a wonderful place to live and help older people lead a socially active life.  And provide peace of mind for family members.

But the financial model has hit some road bumps in the economic collapse. 

Generally, with a continuing care community – you buy in, at usually a significant amount of money, pay additional monthly fees, and then your family gets all or part of your buy-in back when you no longer live there.  That’s why it is so important to be confident in the financial resources of the community you are buying into. 

One award-winning developer –Erickson Retirement Communities– is one company that is struggling under the weight of underperforming real estate cutting back staff and new developments.

 (Here is the Baltimore Sun article on Erickson Retirement ) 

(Here’s a Wall Street Journal blog about Erickson communities)

 So, if you are looking at continuing care communities be vigilant in looking at the financial situation.  In the case of Erickson Communities, the individual developments are run separately so check on the finances of the one you are specifically looking at. The communities have a strong track record in service and refunding fees 100%.  so find out the specifics about the CCR you are looking it:  what’s the track record of returning fees; have the monthly fees been consistent or risen rapidly; is your buy-in price in line with the current market?

 Ask for deals.  If you are having trouble selling your home, you may be able to work out a short term solution that works for you and the care community.

And if you have any doubts, keep looking.  This is not the time to take a financial risk with your home and your health.


Written by Laura Rossman

October 9, 2009 at 7:36 pm

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