Are you (or your parents?) ready for a CCRC?

Are you (or your parents?) ready for a CCRC?
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By Ann Summerson, CFP , CDFA™, Vice President and Financial Planner
About three years ago my father suffered a minor but significant health event which started my parents
down the road to a “retirement home”. Mom was 81 and Dad was 85 years old at the time. And so we
began a search in earnest for a place for them to spend their next, and probably last, stage of life.
My parents ultimately decided on a Continuing Care Retirement Community (CCRC), an increasingly
popular option for seniors. At a CCRC, healthy adults enter “independent living” dwellings: apartments,
condos or even single-family homes. Amenities can include restaurants, fitness facilities, on-site medical
care, clubs, scheduled trips and group activities. As more assistance with everyday living becomes
necessary, the “continuing care” comes into play. Folks can move into an assisted living or nursing care
facility within the same community. Most CCRC’s set a minimum age of 62, but you’ll find the average
age to be much higher.
CCRC’s typically require an entrance fee plus monthly charges. The entrance fee can vary significantly
based on the type and size of home you choose. Here in the Washington DC area an entrance fee from
$300,000 to $600,000 is not uncommon. What happens to that money can vary too, depending on the
type of contract you choose. If you are in a “Life Care” facility, the entrance fee generally goes towards
any future cost of care that you might need. Your monthly fee does not increase as your need for care
increase. In a fee-for-service arrangement, the entrance fee (or most of it) is returned to the heirs. Any
additional care, however, will incur higher fees. It’s important to note that assisted living services can
easily more than double the regular independent living monthly fee. Full nursing care is more expensive
yet. Having long term care insurance can help mitigate these costs…but that’s fodder for another article!
You’re probably getting the idea that CCRC’s are not like the old-style, institutional nursing home where
your grandmother spent her last days. They are vibrant and socially engaging communities. BUT don’t
wait until a “triggering event” to start planning a move. Most CCRC’s require new residents to be in good
health and to be able to live independently when they move in. My parents were lucky that my dad’s
medical issue was more of a wake-up call and did not preempt them from moving to a CCRC.
Now the idea of downsizing from the family home for a move to a CCRC can seem daunting. Fear not!
Luckily, there’s a whole industry centered on moving seniors into retirement homes. Check out the
National Association of Senior Move Managers. (www.nasmm.org) A senior move manager can shepherd
you through the whole downsizing process. They help you decide what to take with you and what to leave
to an estate sale or send to auction. They’ll help you with the floor plan in the new apartment to make
sure everything will fit. They’ll unpack everything in the new place to make it immediately livable, from
making the beds to setting up the kitchen. They really make the whole process much less stressful. Many
CCRC’s already have a network of move managers with which to work.
So if you’re considering a move for yourself or if you’re an adult child wondering what the future holds for
your folks, Continuing Care Retirement Communities are worth a look. A review of your financial plan will
give you the assurance that such a move will be possible when the time comes. Once you’ve made the
decision you could be one of the many who wish they’d moved sooner!
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Ann Summerson, CFP , CDFA™
Vice President
Financial Planner
The Wise Investor Group
Robert W. Baird & Co.
866-758-9473
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Ann is a Financial Planner with Baird, joining with The Wise Investor Group in 2007. She combines her
long felt interest in financial planning with a genuine, personal interest in helping her clients succeed.
Ann began her financial services career with Prudential Securities, joining their securities broker training
program in 1998. She joined The Wise Investor Group in 2001 as a financial planner at Ferris, Baker
Watts. Ann graduated from the University of Virginia with a bachelor’s degree in economics and is a
CERTIFIED FINANCIAL PLANNER™ practitioner.
Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and CFP® in the U.S.
Robert W. Baird & Co. Member SIPC.