Agree. What happens to the down payment when the place goes under?Inquire as to what their bond rating is.
Agree. What happens to the down payment when the place goes under?Inquire as to what their bond rating is.
Great. Then what's the reliable method for finding out the financial soundness of the place with your down payment?The same bond raters that called sub-prime mortgages "investment grade"? Watch the congressional testimony of the bond raters (Moody's, S&P, Fitch) after the MBS collapse. "Our ratings are just opinions and therefore covered by free speech, we can not be held accountable for an opinion".
I would imagine that the reduction in cost from the Class A to lower is about the same as the cost of good LTC insurance for an individual. And they just self insure. So realistic reduction might only be 6-7k/yr? If you are paying 250k entrance fee or more, and 3-4k/month, that's a minimal difference.A side note on a CCRC-
We went to the sales pitch at a big, fancy, and long time CCRC. We didn't want to move there but wanted the education from watching the spiel. The entrance costs were shockingly high when coupled with the monthly fee, but of course you are somewhat pre-paying for your future, so we thought.
Since we both have LTC insurance for 5 years with a high monthly payout, inflation adjusted, we figured that would get us a sizeable reduction in the costs at the CCRC if we assigned the insurance to them. The reduction they would provide was minimal, making the whole package a very poor deal.
How do you get your equity back out when you leave or pass away? Do you get 100% back or just part? The "gross starting price" they use for getting a villa etc. are quite a markup over normal Charlotte prices I'm assuming?Another side note on a CCRC.
The CCRC we've been carefully reviewing would work exceptionally well with my LTCi, which covers 5 years with a 90 day waiting period. It also has equity ownership. https://www.thecypressofcharlotte.com/
How do you get your equity back out when you leave or pass away? Do you get 100% back or just part? The "gross starting price" they use for getting a villa etc. are quite a markup over normal Charlotte prices I'm assuming?
I understand you get the equity from your unit, including any appreciation, when you leave the campus for any reason, including death. This is a hybrid Type B CCRC. One purchases the unit (and I'm not sure that one can compare "normal" real estate prices to these units) and when you leave the campus, the CCRC then takes your unit and re-sells it; your heirs or legal representatives would get the proceeds from the sale.
We have a similar CCRC in my county. It’s called Villa Marin. While this can be a good arrangement for some, you have to investigate closely about the details of selling your unit. Many such “equity” style CCRCs require the owner to continue to pay monthly expenses (even though deceased) until the unit is sold. And, given that it’s a CCRC, there’s a limited market of buyers for them. So, I’d suggest you check out the range of time units have remained on the market until sale, so you can plan for that.
Nonetheless, I'm more concerned about whether one pays the monthly fee when one goes into the skilled nursing facility, where one is also paying the "discounted" service rate for residential care.
A true Type A (Life Care) will not cost you or your spouse more (beyond the extra meals which is required) if you go into Skill Nursing/Memory Care from Independent living. As you already, no two CCRCs are exactly identical in their offerings. Critical to ask and read in detail the Resident Handbook and all financial and operational disclosures. And then validate how they operate in reality during your conversations with current residents. "Trust but Inspect"!
It is clear you have a good grasp of the differences. When we looked at a Type B property which we liked, the sales rep seemed to want to defer providing the actual contractual language (actually never saw but did received the current policy). At this property, the provisions and costs to access higher levels of care seemed to be more administrative procedures rather than contractual language. For example, X days a month in Skill Nursing at X% of then current price) Caveat emptor!Well, as someone else implied earlier, it might be helpful to compare apples to apples. I'm not interested in a Type A program. I'm interested in Type B or C programs, with equity ownership in the unit you reside. In a Type A, you are prepaying for skilled nursing care, whether you actually use that care later in life, as the payment is all rolled into your entrance fee. In a Type B, you still have access to life care treatment in a skilled nursing facility on a pay-as-you go basis, which would dovetail with my LTCi. In the Type B CCRC I'm considering, assisted living or home care in your residence is covered by your entrance fee (of 10% of the purchase price of your unit) and monthly fee, so there isn't any additional cost when care occurs in your unit. But I'll have to see if the CCRC will reduce my monthly rate or whether my LTCi will reimburse me for that care as my LTCi covers assisted living/home care. Preliminarily, the CCRC has told me they will work with LTCi though I'm not quite sure what that means.
One thing I have done is take a close look the the financial statement of the CCRC I am interested in, looking at reserves, how the obligation to refund the entrance fee is treated, etc. You might want to get an attorney or CPA to look at the financials with you.
I think occupancy numbers are also important. The CCRC we are interested in is full and has a substantial waiting list.
On the question of what happens if you need to go to skilled nursing but skilled nursing is full, our CCRC agreement provides in that case the CCRC must find you an "equivalent" skilled nursing place in another facility and the CCRC pays for it until a bed opens up in our CCRC. This CCRC is a Class A life care community where the cost to you if you go into skilled nursing does not go up (except for additional meals).
The CCRC we are interested in has a Trust fund established to pay the fees of any resident who legitimately runs out of funds, several million dollars are in this Trust fund. The money in the Trust fund has primarily come from memorial funds and bequests from deceased residents. I think this substantial Trust fund is a good thing and a sign of a healthy CCRC.
I asked about how often the Trust fund is used and was told they currently have 2 ladies (each over age 100) who are in memory care whose monthly fees are being paid by the trust fund.
We may or may not sell our SFH; there are several options open to us so we will take our time to consider what will work out best long-term.
I'm curious. Just wondering why you wouldn't be selling your SFH if moving into a CCRC? Are you planning on renting it out or something?
omni
Please keep us updated with what you're doing and what you find? I and probably the rest of the Bay Area folks would be very interested. Thanks.We made a 2019 resolution to begin researching senior living facilities - preferably in our area (San Francisco Bay Area), although being footloose and child-free, we could technically move anywhere.
We first did this back in 2014 for my MIL so it will be interesting to see what changes have happened. There's a couple of brand-new facilities (for profit) that have opened up, for us to visit.
DH and I talked to our financial adviser via conference call to let him know what we were planning. We already know that facility types, social cultures, and contracts vary wildly, since there are no government standards except for OSHA and Health Dept./Medicare rules.
We discussed portfolio allocation and he advised us of how much he'd be able to liquidate quickly if need be. Any amount larger would need repositioning so might take some time.
He congratulated us for "thinking ahead". He's been in business for 30 yrs and has already dealt with clients who've had seniorcare needs and health issues. When we start winnowing down the potential list of facilities, his firm will help review all the contracts.
We may or may not sell our SFH; there are several options open to us so we will take our time to consider what will work out best long-term.
Please keep us updated with what you're doing and what you find? I and probably the rest of the Bay Area folks would be very interested. Thanks.