Retirement Community - Entrance fee based on age?

C

CCinPA

Confused about dryer sheets
Joined
Jan 13, 2024
Messages
5
I am considering retirement community. They are adding a fee because I am under 70. Thoughts?
 
That's age discrimination, they are getting their revenge ;) :LOL:

Not enough info for a good answer:

Is this simply a gated community type thing or like FL Villages, or has health care included ?

How much is the extra ?
Is it one time or yearly until you age out and if so is it on a decreasing/sliding scale ?
 
That is not just a retirement community - it's a CCRC. Quite different. The question as to our thoughts about the fee is really not relevant - what are YOUR thoughts? How much is it, and for how long would it be in effect? One time, $1000, $10000? etc.

Is everything else about it perfect for you?
 
Aerides said:
That is not just a retirement community - it's a CCRC. Quite different. The question as to our thoughts about the fee is really not relevant - what are YOUR thoughts? How much is it, and for how long would it be in effect? One time, $1000, $10000? etc.

Is everything else about it perfect for you?
Click to expand...

I'm 67. The additional one-time entrance fee of $5,000.

I don't want to feel I am being taking advantage of. I really want the explanation of their 'insurance commission" reference.
 
Are they calling the under 70 added fee their "insurance commission"?
That is an odd thing, but they should be able to answer your question to your satisfaction. If not, that would not be a place I would be interested in.
 
One time "community fee" of $5000 to $10,000 is normal, but that is for everyone regardless of age. Are they looking to charge you that as well?

I would ask for an explanation of what the $5000 insurance commission is for. If it doesn't sound appropriate to you, just be honest and tell them you love everything about the place and are ready to sign except for the $5000. If they don't want to budge, then tell them you have to think about it more, have a few other places to check out, and will get back to them once you decide.
 
njhowie said:
One time "community fee" of $5000 to $10,000 is normal, but that is for everyone regardless of age. Are they looking to charge you that as well?

I would ask for an explanation of what the $5000 insurance commission is for. If it doesn't sound appropriate to you, just be honest and tell them you love everything about the place and are ready to sign except for the $5000. If they don't want to budge, then tell them you have to think about it more, have a few other places to check out, and will get back to them once you decide.
Click to expand...


The $5,000 is in addition to the $213,000 entrance fee.
 
CCinPA said:
The $5,000 is in addition to the $213,000 entrance fee.
Click to expand...

So it sounds like there is not an additional charge for a community fee. We had mom at two different places. The first charged $8000 the second $5000.

Regardless, it doesn't hurt to ask for more details regarding it and tell them you're not comfortable with it if you're not.
 
It's too bad the CCRC doesn't make their fees more transparent, but you can ask for a detailed explanation - in writing. If they refuse, I think you might want to take a pass on this particular CCRC. You don't want to commit to a CCRC that refuses to be transparent.

AND as others here (and on other threads) have mentioned it's important to conduct due diligence on a place you might be spending such a large amount up front. These places DO fail. The big one in my home town changed hands from a religious organization to a different not-for-profit organization. IIRC the transition was relatively seamless but residents had to pay more money to stay since the old "owner" went bankrupt. Now, it's the premier CCRC in the area, but I suspect many such places are on the knife edge of solvency. Do your homew*rk - even if it means hiring a CPA for a couple of hours to review the documents. YMMV as always.
 
I agree with the recommendations to do further due diligence. The term 'insurance commission' is worrisome. You do need a thorough explanation and you may want to contact the state Insurance Commissioner after you have it to make sure it can be charged.
 
Gotadimple said:
I agree with the recommendations to do further due diligence. The term 'insurance commission' is worrisome. You do need a thorough explanation and you may want to contact the state Insurance Commissioner after you have it to make sure it can be charged.
Click to expand...

I'd ask to see their insurance license and E&O Policy if they are charging insurance commission.
 
There is a $231k entrance fee and a $5k age related fee added on in OPs case. That's $236k total. Compare that number to the bottom line at other CCRC's you are considering. They all have ways of slicing and dicing the amount you are going to have to pay as an entrance fee. If the $236 is competitive with the other places and you like this place and have checked out all the subjective factors, I wouldn't let it bother me.

As a thought on what the fee might represent, remember that Type A CCRC's have an insurance premium-like component built into their entrance fees and monthly fees. This pays for the fact that you are buying a form of LTC insurance. Younger people represent a higher risk of using LTC and therefore might be charged a bit more.
 
DW and I have been shopping Type A CCRC's for several years. It still makes our heads spin although we've read books, listened to dozens of presentations, talked to residents and spent hours with sales reps asking questions. And we even have spreadsheets doing comparisons of several facilities regarding costs and benefits.

We find this to be the toughest shopping we've ever done, by far, and dwarfs simple projects like getting a decent deal on a car, major appliance or even a house. We're now delving into Type C CCRC's since, while likely to be more expensive in the long run, you can walk away at the end of any lease period with no fear of losing deposits, etc. Or, if something promised is not being delivered or services are not up to your expectations, you're outa there!
 
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CCinPA said:
I don't want to feel I am being taking advantage of. I really want the explanation of their 'insurance commission" reference.
Click to expand...

I can't find the reference to an "insurance commission" in the link you provided. Can you point it out please so we can see it in context?
 
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CCinPA said:
I am considering retirement community. They are adding a fee because I am under 70. Thoughts?
Click to expand...

I went through helping my mom evaluating and moving into a CCRC 5 years ago now. I have a couple thoughts:

I also consider a CCRC as a likely destination for me, but my take on when revolves around delaying until it's absolutely necessary - but I'm still able to medically qualify. The monthly rent is considerably more than just a comparable apartment and the opportunity cost of the bond locked away adds up over time. My mom is still doing well and happy in her CCRC 5 years later. But it is expensive, and so far my mom has received very little benefit other than a nice apartment rental for what is a rather high price. Hindsight would be my mom would be better off moving into her CCRC today - at age 93 - and pocketing the previous 5 years expenses, but we didn't know that at the time of course. For my decision, I will play it by ear, but I don't foresee moving into a CCRC before/around age 80 or later in my plans. Hopefully much later. Nothing would please me more than moving into a nice CCRC independent living apartment at age 90 (25 years from now).

When evaluating the move in costs, remember to ask what percentage can be claimed as a medical expense on itemized taxes. The total due on move in is broken down into all kinds of categories and a portion will be itemizable medical expenses. That is especially important in the first year as some portion of the non-refundable portion of the bond will be deductible.
 
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CCinPA said:
The $5,000 is in addition to the $213,000 entrance fee.
Click to expand...

Does the entrance fee include a life plan contract where your monthly fee will not increase if/when you need a higher level of care? If so, a one-time charge of $5000 seems like a very small additional amount if you enter in your 60s, given the high cost of CCRCs generally & how long you might be living there.

If there's not a life plan contract but it's a "fee for services" plan, I don't understand the "surcharge" for entering at a young age, but that's up to you to evaluate. Can you afford it? Do you want to live there? There's a lot you have to learn before making a decision.
 
youbet said:
There is a $231k entrance fee and a $5k age related fee added on in OPs case. That's $236k total. Compare that number to the bottom line at other CCRC's you are considering. They all have ways of slicing and dicing the amount you are going to have to pay as an entrance fee. If the $236 is competitive with the other places and you like this place and have checked out all the subjective factors, I wouldn't let it bother me.

As a thought on what the fee might represent, remember that Type A CCRC's have an insurance premium-like component built into their entrance fees and monthly fees. This pays for the fact that you are buying a form of LTC insurance. Younger people represent a higher risk of using LTC and therefore might be charged a bit more.
Click to expand...

Typically, CCRCs prefer people to move in at an earlier age as the odds are greater they will be able to live in independent living longer and won't require specialized care until much later. I have done much research on CCRCs and have never heard of an extra fee based on moving in at a younger age. Most CCRCs want you to live independently for 3-5 years before needing specialized care, which is much more costly to them.
 
youbet said:
DW and I have been shopping Type A CCRC's for several years. It still makes our heads spin although we've read books, listened to dozens of presentations, talked to residents and spent hours with sales reps asking questions. And we even have spreadsheets doing comparisons of several facilities regarding costs and benefits.

We find this to be the toughest shopping we've ever done, by far, and dwarfs simple projects like getting a decent deal on a car, major appliance or even a house. We're now delving into Type C CCRC's since, while likely to be more expensive in the long run, you can walk away at the end of any lease period with no fear of losing deposits, etc. Or, if something promised is not being delivered or services are not up to your expectations, you're outa there!
Click to expand...

Some Type A contracts have refundable provisions (25%, 50%, 75% - I've seen one with 100%). The more refundable, the larger the upfront cost and monthly fees.
 
bada bing said:
I went through helping my mom evaluating and moving into a CCRC 5 years ago now. I have a couple thoughts:

I also consider a CCRC as a likely destination for me, but my take on when revolves around delaying until it's absolutely necessary - but I'm still able to medically qualify. The monthly rent is considerably more than just a comparable apartment and the opportunity cost of the bond locked away adds up over time. My mom is still doing well and happy in her CCRC 5 years later. But it is expensive, and so far my mom has received very little benefit other than a nice apartment rental for what is a rather high price. Hindsight would be my mom would be better off moving into her CCRC today - at age 93 - and pocketing the previous 5 years expenses, but we didn't know that at the time of course. For my decision, I will play it by ear, but I don't foresee moving into a CCRC before/around age 80 or later in my plans. Hopefully much later. Nothing would please me more than moving into a nice CCRC independent living apartment at age 90 (25 years from now).

When evaluating the move in costs, remember to ask what percentage can be claimed as a medical expense on itemized taxes. The total due on move in is broken down into all kinds of categories and a portion will be itemizable medical expenses. That is especially important in the first year as some portion of the non-refundable portion of the bond will be deductible.
Click to expand...

Moving into a CCRC is expensive (both the initial fee as well as monthly fees) - there's no way to sugarcoat it. The nicest ones are the most expensive. Most people who move into one are doing it for the security of the lifetime healthcare guarantee. Trying to save money by delaying entering is risky, as one's health may deteriorate to the point of not qualifying for admission.

With the standard deduction where it is today, some of the initial fee would likely be deductible but most would not be able to deduct any of the monthly/annual fees as that combined with other itemized deductions would likely be less than the standard deduction.
 
lucky penny said:
Does the entrance fee include a life plan contract where your monthly fee will not increase if/when you need a higher level of care? If so, a one-time charge of $5000 seems like a very small additional amount if you enter in your 60s, given the high cost of CCRCs generally & how long you might be living there.

If there's not a life plan contract but it's a "fee for services" plan, I don't understand the "surcharge" for entering at a young age, but that's up to you to evaluate. Can you afford it? Do you want to live there? There's a lot you have to learn before making a decision.
Click to expand...

I've seen some Type A contracts with an extra lifecare fee (in addition to the entrance fee), but never based on one's age, and much more than $5,000.
 
Happyretired said:
Some Type A contracts have refundable provisions (25%, 50%, 75% - I've seen one with 100%). The more refundable, the larger the upfront cost and monthly fees.
Click to expand...

Very familiar with that. But, I've never seen a 100% refundable contract.

Around here, 90% is typical. But you only get about 85% after fees and other BS. So, out of a $400k buy in, you'd lose $60k if after a couple of years you wanted to move on down the road for whatever reason.

Just another thing to consider when shopping for CCRC's. Pay as you go, Type C, contracts are looking better and better to us.
 
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