Is a CCRC a Good Financial Fit for You?

Prior to starting myLifeSite, I spent nearly 14 years in the financial planning business, helping many older adults manage their retirement and long-term care plans. In fact, it was during my time in the industry that I recognized a need for better guidance related to complex senior living decisions, particularly when it comes to navigating the myriad details associated with continuing care retirement communities (CCRCs or “life plan” communities).

One of the most important aspects of the decision is no doubt affordability. Affordability can mean different things to different people. For some, affordability may mean never having to dip into their principal, i.e., draw down their assets. For others, it could simply mean having a high likelihood of never running out of money, even if it becomes necessary to draw down on assets at some point.

Yet, no matter how one views affordability, the affordability analysis is made more complicated when it comes to choosing a CCRC because of the various types of residency contracts available in the industry, the trade-offs between the cost of healthcare services today versus in the future, and the likely addition of an entry fee, which may be refundable to some degree.

>> Related: A Primer on CCRC Residency Contracts

Hard numbers

For some would-be residents of a CCRC, it is difficult to commit to putting in the time and effort of researching CCRC options without first understanding which ones are “in the ballpark” for them financially—not just today, but over their lifetime.

Furthermore, since most life plan communities require a financial evaluation as part of the qualification process, some potential residents may even have a fear of rejection, so to speak. They would prefer some level of financial confidence before going through a more in-depth financial qualification process with a representative of the community.

>> Video: CCRC Entrance Requirements

Although a growing number of CCRCs are publishing pricing on their website, it can still be difficult to determine how affordable the community may be over the long-term, given the various factors I mentioned above. For example, some CCRCs may be more affordable over lifetime than they first appear because the cost of healthcare services, if needed, may be well-below the market rate.

A new solution to the CCRC cost equation

To help bridge this gap and provide prospective residents with a preliminary affordability snapshot, myLifeSite has recently completed development of a powerful financial tool called MoneyGauge. It is an easy-to-use application offered on a CCRC’s website for those who may be interested in the community.

The affordability calculations on MoneyGauge incorporate specific pricing for that community, as well as several hypothetical assumptions related to things like growth rates, inflation rates, life expectancy, and more.

MoneyGauge is meant to be a quick and easy analysis, and therefore does not gather all of the information that would ultimately be necessary for the CCRC to make a decision on a prospect’s financial qualification. However, for those who just want to know if they are “in the ballpark,” MoneyGauge is a great first step.

Accessing MoneyGauge

We just released MoneyGauge a few months ago, but many CCRCs are already finding it to be a great online resource for their potential residents. If you live in any of the following regions and are considering one of the CCRCs listed below, be sure to visit their website to generate your personal MoneyGauge assessment.