myLifeSite Blog Archives provides information and guidance on senior living, life plan communities, CCRCs, independent living, and closely related topics from myLifeSite.
More information on deducting retirement community entry fees
Planning ahead for the later stages of retirement involves significantly more than this issue of cost alone. While LTCi will provide dollars to cover some or all of the cost of long-term care major headaches may still lie ahead for your clients and their families if they do not understand the implications of various retirement living choices and which one is most appropriate for them.
Yet, there was one other aspect I wanted to consider and I was curious to see how it might impact my results. I wanted to see if owning or purchasing life insurance would impact the results. With rare exception I found that if the resident(s) already owns life insurance it really does not impact the results because, whether the residents choose the refundable contract or the standard contract, the life insurance proceeds simply add dollars to the end results.
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Today, I want to summarize some comparative scenarios that I ran on our proprietary software system called DecisionGenie to help you gain an idea of when it might make the most sense to choose a refundable entry fee contract. Of course, these projections are purely hypothetical and there is no way I could run every type of scenario that a prospective resident could potentially encounter. Therefore, this analysis is only meant to give you some general direction in your planning. Ultimately you should consider working with a financial planning professional who can help you analyze your unique situation.
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Many entry fee retirement communities will offer residents the choice of a refundable entry fee as an alternative to their standard, non-refundable contract. The trade-off: a refundable entry fee will generally be higher than the entry fee for the same residential unit under the standard contract.
Prospective residents of continuing care retirement communities offering such a refund often face a dilemma: pay the higher entry fee but have the peace of mind of knowing that some- or all- of the entry fee will be refunded if the resident moves out of the community, or at death. (In the case of the latter the refund would go to the heirs.) Alternatively, the resident could choose to save money up-front while knowing that no portion of the entry fee will be refunded.
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877-699-2272
Robert Willett of Raleigh, North Carolina based News & Observer, recently wrote an eye-opening article highlighting the work of researchers at the AARP Foundation who are citing social isolation as a key factor that can ultimately have dire consequences for retirees who live alone. Many lack an adequate support network, as well as the resources, ability, or will to get out of the house regularly. This is a reality that could impact millions of seniors in the coming decade and beyond.
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877-699-2272
A few weeks ago I wrote a two part series titled “Understanding the Impact of Long-Term Care Insurance in CCRCs.” One particular point of focus was on those retirement communities that offer a type A contract, sometimes referred to as “full life care,” and whether or not there is a need for a resident of such a community to own private long-term care insurance. I shared the post with some of the groups I belong to on LinkedIn and received a couple of very good comments, which point to yet another reason why it could sense for prospective residents of full life care retirement communities to maintain coverage.
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info@lifesitelogics.com
877-699-2272
Choosing a continue care retirement community with senior services is a significant lifestyle and financial decision so how do you know if one is right for you?
Indoor saltwater pools, hydro-massage rooms, Napa Valley’s finest wines, sushi chefs….all the characteristics of a five-star hotel, right? Actually, these are the types of amenities you will now find at a growing number of retirement communities across the country.
Indoor saltwater pools, hydro-massage rooms, Napa Valley’s finest wines, sushi chefs….all the characteristics of a five-star hotel, right? Actually, according to any Senior Living Guide these are the types of amenities you will now find at a growing number of retirement communities across the country.