Planning ahead for the later stages of retirement can help retirees and their loved ones avoid difficult, and often costly, situations in the future.
The process for researching retirement living and care alternatives is not a simple one and often creates more questions than answers.
The decision of where to live in retirement can often be a stressful and challenging one for all members of a family, not only for the individual or couple who is in search of the “right living environment.”
As a proponent of planning well ahead for major decisions like this, I advise people who are typically in “mid-retirement” or when they are still active and able to fully evaluate their living options for their later phases of retirement. Otherwise, delaying these important decisions about tomorrow’s needs may leave you and your loved ones facing difficult, and often costly, situations in the future.
An increasingly popular, but often complex, retirement living alternative is a Continuing Care Retirement Community, or CCRCs. Choosing the right community is a major decision and thus requires much research and evaluation.
The distinguishing characteristic of a CCRC is that it contractually provides a “continuum of care,” beginning with independent living and also offering assisted living and/or skilled nursing care. Therefore CCRCs are typically appropriate for those retirees who are independent and active today, but want to have a plan in place for the future.
CCRCs are often thought to be most appropriate for the affluent segment of the retiree population since many require an entry fee, which can be in the hundreds of thousands of dollars, as well as monthly fees. However, there are some CCRC that are more affordable and many are beginning to offer rental contracts with no entrance fees.
Brad Breeding, who is an expert on the topic of CCRCs and CEO of LifeSite Logics, which is a company that helps people and advisors to choose the right CCRC, feels that choosing the most appropriate CCRC requires considering these four key areas:
- Contract details and options
- Financial stability of the community
- Health care
Moving to a CCRC can provide a new experience that many new CCRC residents often describe as “liberating” as the burden of maintaining a home is lifted. This new sense of freedom from everyday chores, combined with the promise of health care when needed, provides a genuine sense of mental, emotional, and physical relief.
However, any move can also create more stress as well and therefore, it’s important to ensure that the setting, services and amenities, and mission match up with your personal preferences of the retiree who is moving there.
The need for building and nurturing a strong social structure is vital for any retiree and should be an important consideration of any CCRC option. Therefore you should learn about the culture, as well as other aspects, before moving into the community. Breeding advises that it’s okay to ask, “is the CCRC affiliated with any particular religious or fraternal organization and, if so, how might this impact you or your comfort level as a resident? Many CCRCs will allow you to stay overnight as a guest so you can develop a sense of what it might be like to live there.”
Jane Zarem states in Today’s Continuing Care Retirement Community that “An overall objective of any CCRC is to create an environment and choices that enable older adults to experience fully actualized, creative and satisfying aging.”
Therefore seeking CCRCs which include a number of common areas onsite to accommodate socialization and activities, as well as other amenities such as auditoriums and theatres, ballrooms for parties and celebrations, woodworking shops, libraries, and business centers, should be important considerations. Having the ability to go beyond the community through “field trips” and the availability of transportation options are also important considerations so that the retiree feels independent and not “confined”.
Contract details and options
Breeding, points out that there are “five main types of contracts offered by CCRCs across the country. They range from full life care communities, whereby residents essentially pre-pay for future custodial and nursing care needs, to fee-for-service and rental contracts, which offer lower entry fees (or no entry fee at all) but charge the full market rate when care is required. Some communities offer multiple contracts to choose from. You should have an understanding of each type and which is most suitable for your unique situation, and which is most compatible with long-term care insurance you may own.”
Working with a qualified financial planner can be helpful, as noted in an article on “Retirement Homes for Less” in The Wall Street Journal: “Though the trend is in its early stages, other financial planners- especially those who serve a number of elderly clients- are starting to help clients evaluate local retirement living options and their costs.”
Financial stability of the community
As with any managed living community, there needs to be a process of due diligence done on the CCRC before signing any long-term contract. Breeding advises “that prospective retirees and their families consider several things relating to the financial stability of the CCRC, including, but not limited to, occupancy ratios in independent living, actuarial projections, history of fee increases, and financial ratios covering cash reserves, debt levels, and profitability.”
Breeding makes it clear that “although CCRCs offer attractive amenities for independent living, it is important to remember the primary reason for considering this type of retirement community: guaranteed access to health care.”
Therefore, Breeding feels that when evaluating healthcare services in a CCRC, the following items must be considered:
- Does the community proudly promote health care as part of its marketing message?
- What is unique about their care, compared to other communities? What distinguishes them from the competition?
- Examine staffing ratios and whether the care is provided directly by registered nurses (RNs) or by supervised Licensed Practical Nurses (LPNs).
- Is there a record of complaints on file and, if so, how can you review it? The process for filing complaints could vary from state to state.
- If the community is Medicare-certified (as opposed to private pay only) then the skilled nursing unit will be rated athttp://www.medicare.gov/NursingHomeCompare/search.aspx
- Is the community accredited by CARF-CCAC? Accreditation is voluntary, as well as time consuming and costly, and you should not assume that non-accredited facilities will offer poor care. Some CCRCs simply may not feel that accreditation is necessary. However, accreditation can give you the peace of mind that that CCRC has met rigorous standards related to health care (as well as other areas of operation and management).
As with most things related to aging, retirement and later life, discussions should include family members and decisions should be well researched, thought out and if needed, experts should be considered. The decision of where and how to live in retirement is not one to take lightly.
Through the evaluation of Breeding’s 4 key areas, retirees and their family can effectively consider which retirement living alternative is best suited for them. Proper planning and family discussions will allow retirees and their family to make effective living decisions and approach their later years with confidence and peace of mind.
About LifeSite Logics
LifeSite Logics is an independent, objective resource for information services and research on continuing care retirement communities (CCRCs). LifeSite Logics provides Web-based tools designed to assist professional advisors and prospective CCRC residents in choosing the community that best fits their lifestyle preferences, healthcare needs, and financial resources:lifesitelogics.com.