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My husband and I are considering buying into a CCRC. We can afford it, but I am concerned about the financial stability of the community that we might otherwise prefer. They are a non-profit, but are losing money every year and operating on city revenue bonds. I guess it's a great deal for residents now, who are obviously paying less than the cost of the services they get; but we could live another 20-30 years, and if we buy in now, is there much assurance that they can fulfill our contract? When I asked the manager, he said that the management company would find someplace to borrow more money if they need to. I know this industry has had financial problems in some communities. Does anyone know about the resolution of such problems in any specific community or have any advice for me? If we make the buy-in and pay the monthly fee for several years, I fear that we won't have the financial or emotional resources to relocate if the CCRC folds.

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well my suggestion is if you want to throw the money that way & gamble then go for it ...you might be better to invest in stocks wallstreet type maybe even get a mutual fund from your bank if you buy the right time you can make good money the longer you leave the money in ^& the economy is going up i would invest 1/4th of what you have for sure & keep the rest if the market crashes if you have the time ...then when the market goes low then throw all in ...no one can predict when the market will crash or correct it self ..also you can look into try to google this i have not but google this what stocks will split & when after it splits then put your money in that also make sure it is not so saturated like walmart ..a young company is best like walmart was ..i know that i learned from someone when i worked at sam's club from 92 to 2009 but we discussed this among our selves if i bought 1 share of walmart stock when it started back then in 92 or so fromthe 70's to 92 1 share I would have had a million dollars so the market general goes up for the most part just slow or fast i would say it is kinda fast ...let me give you another instance in like 1987 i invested into a company called back then i started to invest into it was 1.34 ashare i had a lot of shares then in early 1990's they changed it to walmart demexico & did a 1 to 10 reversal split which means that 100 shares was 10 shares but if it was worth 2.00$ a share then it was 20.00$ a share still got the same ..but i spent maybe 4 thousand $ for what i had & when i started to sell i had round 22,000 thousand $ & i sold at the right time it went down & never went up much ..& all i need the money back then no other reason i sold it & i did not know about it was going down was selling round 2010 yr ..so just get into something that seems to be a climber for sure ...
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We had a slew of folks in the ERickson CCRCs. All went well for them but it is a good example and there was a lot published about it. They are still going strong in my area.
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I’d suggest you carefully look into what happens should you & spouse move into CCRC and then your situation dramatically changes. Like 1 of you die and the other decides to move to be closer to family in another city.

I was executor for an aunt who had a Type A contract for a CCRC. Dealing with CCRC was super sticky in that I as executor could not find a new “buyer” for her “premier garden home” (lol!) or otherwise easily deal with it as an asset of her estate as it continued to be owned & in control of the CCRC. They & only they can determine when it gets placed onto market, if a buyer is approved, doing anything to get it market ready, etc. And for more fun, it could not be used by myself or heirs during this period as you could only stay if you were a guest of the CCRC “resident owner”. Her out of state nephew who volunteered to clear her place was allowed to spend 1 night there but that was it. My experience is that there is little motivation for CCRC to get a unit back onto market (unless CCRCs are in super high demand where you live) or quickly refund any $$$ should there actually be some. The refund from buy in was based on overall buy in paid less resident days & the set low 6 figure non-refundable entry fee & they did that as per contract eventually (over a year after death). But there were still all these monthly & market ready costs still nibbling till then. On retrospect my aunts situation was easy as there were other issues with her hot mess of an estate so needling & waiting on CCRC to find a new buyer and get refund was just another item. But if it had been where heirs needed estate wrapped up quickly, I bet they would have done a lower figure settlement offer. The issue is CCRC, I now realize, do not have to maintain a set escrow like account for refunds, which I find amazing & scary.

Devil is in the details. Really also look to see what medical conditions are excluded from the provided within buy in fee at the CCRC care list. Especially how post hospitalization doctors orders are handled.

Probably the nightmare scenario for CCRC was the Erickson bankruptcies of 20+ CCRCs a decade ago. Also a good NYT article from 2014 on problems with Vi CCRCs and the class action filed.
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I have had experience with bankrupt CCRCs or life plan communities. The percentages of this happening have been very low, but these events have occurred and in most cases the residents' entrance fee refunds have been treated by the judges as a credit class higher than the other creditors for the communities. This is not the law, even in FL, but as mentioned above is what has occurred most frequently.
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The number of bankruptcies in CCRCs (or Life Plan communities) is a very low percentage; but if you or more parents were considering moving I would do what I could to avoid the stress that puts on residents where it has happened. Most cases are similar to those noted above whereby the residents refunds (if the entrance fee is refundable) have been honored as a creditor class above other creditors. This is not what the law, even in Florida requires.
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guestshopadmin: Yes, you are correct that you must itemize in order to claim the investment fees. However, you're incorrect. You're allowed to claim all of the fees.
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Indian river estates in Vero Beach, FL is a CCRC. I know they treat their employees well as they have a low turnover and an excellent reputation as an employer (my nurse daughter in law is trying to get a job there) and happy employees are a good thing! Good luck
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I think you need to talk to someone well versed in this. Not sure if that would be a CPA or a lawyer. Or as firm who has both. I definitely wouldn't sign anything without a lawyer looking at it. We have a place like that here. The place has cottages, apartments, AL and long-term nursing. You pay something like $200,000 to buy in. Supposedly when you need long-term nursing a percentage of that goes to ur care. But, u additionally pay over a $1000 a month for ur cottage or apartment. To me it sounds fishy. But I have heard it's done a lot in Fla.
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As bluebonnets points out, even if you have income from annuities, you still may someday need someone to help you manage that income. And income on a $1,000,000 annuity at 8% is not enough to cover a year in a good SNF.
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Only deductible if you itemize deductions and subject to miscellaneous deduction limitations on schedule A.
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bluebonnets: Not all investment counselors charge outrageous fees. You really have to do homework. Also of note, those fees are tax deductible.
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what is your guarantee that you keep your money if it fails ??i would make sure you do not lose money on it ..
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Put that CCRC on the "shortlist" for sure! If they are reporting poor financial status now, that should give you a very good indication of future performance! For any CCRC, you really need to investigate thoroughly, e. g. go to the facility several times, taking someone along with you also. That person can give you their unbiased opinion. I have a very young (61 years of age) SIL who is going to go into contract with a CCRC very soon. I am not an advocate of going into an alternative living arrangement so young, though!
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We have also considered annuities. There are some that are Medicare compliant, but they do come with steep fees, and really their "guarantee" is only as good as the financial condition of the Insurance company that issues them.
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Bluebonnets, thanks for the Revocable living trust suggestion. I think we will make an appointment with an elder law attorney and get all our plans in order. He should be able to give some advice on Indiana laws and experience regarding bankrupt CCRCs, too.
The two CCRCs we are considering are a financially sound one in FL and one in IN, near our current home.
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Annuities can be problematic, except for the salesperson -- who receives outrageous fees. The great majority sold today are indexed or tied to stock market returns. There is no inflation protection. They are very likely not Medicaid compliant.

That said, however we hold our money, we need someone to look out for our finances when we cannot.
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Guestshopadmin, thanks for your reply! I did explore the info on Devonshire. It appears to me that FL protects seniors, perhaps better than other states do. So perhaps that is another factor to consider in this decision.
Look, everyone else, I see the "major red flag" and recognize it for what it is. My question is: After the race is red-flagged, what happens to the debris left on the track, and how do the survivors get back in the race?
In the Devonshire case, creditors took over and guaranteed the residents' contracts. Good result, so far at least.
I'm curious what might have happened in other states, especially without laws that might have required the lenders to do that.
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Depending on your level of assets, you may want to put your money into an annuity. It will give you a guaranteed income for life (even if you live to be 110), and you can use those funds to pay for housing and care.
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A CCRC can be a good idea IF it is financially sound. Always have a CPA and an attorney review the financial statements, CCRG documents and proposed contracts before handing over a dime. You don't want your hard-earned money to disappear, leaving you out in the cold.

With no relatives left to help you out later on, you might also consider a Revocable Living Trust which names a geriatric care manager and a trustee and specifies how you want your situation and choices to be evaluated and how often and how you want your money to be spent. You can be very specific.
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Try doing a search on google for Devonshire at PGA National, a CCRC in Palm Beach Gardens, Fla. This property went through bankruptcy and restructuring. The Kiplinger Report also had a good article explaining how to evaluate this sort of arrangement (found using google search). Biggest problem seems to be the treatment of residents/owners as unsecured creditors in the bankruptcy proceedings - which can really cause problems with the investment in CCRC and long term plans.
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Freq, thanks for your comment. I know there are the other options that you describe, but we are looking specifically for a community that guarantees availability of long-term care even if we run out of money. These are CCRCs or Life Care Communities.
The reason is because I have no heirs to look after my interests should I become unable to. A CCRC guarantees that you can stay in their facility at whatever level of care you need--even if you have to go on Medicaid. Typically, their facilities are much nicer than what a guardian would be able to secure for me under Medicaid.
My question is whether anyone knows of such a facility that filed for bankruptcy and how that affected the residents.
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I would put that community on the "not" list and start looking for a more well established retirement community.

When the Manager said "the community would find someplace to borrow more money" that was a major red flag.   Find a long establish place by a well known builder who has built successful communities nationwide.

I know I have been looking in my area at the 55+ community where one can purchase a small house or one where the houses are attached to each other [cheaper real estate tax].   There is such a variety out there.
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