I EXPECTED TO SPEND early 2017 blogging about my fourth round-the-world trip, which I’d just completed, and planning my next journey. Instead, I spent much of the year on the couch with a heating pad, in between assorted medical appointments, everything from acupuncture to meeting with an infectious disease specialist.
Eventually, I got a definitive diagnosis—I had a form of rheumatoid arthritis—and, in early 2018, an effective medication. But I had been forcibly reminded of something I’d first learned 10 years earlier, when I broke my ankle. My house, as things currently stood, was not suitable for aging in place.
But was aging in place a good idea? During 2017, I learned just how debilitating persistent pain could be. I was 70, single (by choice), childless (by choice) and with no close relatives nearer than England. I already had a chronic, potentially disabling disease. What if I suffered a stroke or heart attack, or fell and broke a hip, or developed dementia? At a moment when I was least able to handle the decision, I’d have to find and fund in-home care, or move to an assisted living or skilled nursing facility.
In addition, I was thoroughly tired of the responsibility and cost of maintaining my house, not to mention preparing all my meals. Those of you thinking that your spouse could handle such things should bear in mind that, at some point, one of you will be a surviving spouse. Even if you have children close by, do you really want to burden them with your care?
I had friends living happily in continuing care retirement communities, and there were a number of CCRCs nearby. A CCRC typically offers a continuum of care from independent living to assisted living to skilled nursing. It was time to do my research. Ruth Alvarez’s guide to CCRCs proved invaluable. HumbleDollar readers can also get a good introduction to the four types of CCRC by reading Howard Rohleder’s 2022 article.
For me, the choice of type was straightforward. I wanted a place that promised not to throw me out if I ran out of money and preferably backed that promise with a benevolent fund. I wanted a nonprofit, because a good for-profit might too easily be taken over by a bad one. I wanted on-site assisted living and skilled nursing, which is pretty standard among CCRCs. I wanted a place that accepted Medicare and Medicaid, and had a good rating. I wanted a place that had been open for a while and had sound financials. And I wanted an on-site clinic, exercise facilities and plenty of activities. I started collecting brochures.
If a CCRC is regulated, it’s regulated by the state government. North Carolina requires CCRCs to give prospective residents a detailed financial and policy disclosure statement, and also post these documents online. That’s how I learned that one potential CCRC didn’t own its land and buildings, and another appeared to be operating at a loss. The brochures were fairly basic, although they usually included floor plans. Clearly, a visit was the acid test.
My first choice turned out to be an unexpected disappointment. It didn’t feel friendly and seemed rather isolated. Another promising prospect, offering plenty of continuing education opportunities in conjunction with one of the local universities, had ceilings so low that the apartments felt claustrophobic. It also seemed to be spending a lot of money on décor, and charged comparatively more for independent living so that it could charge less for assisted living. I preferred to gamble that I’d spend longer in independent living.
I ended up putting down a refundable deposit at a nonprofit CCRC with good-looking financials that had been operating for 30 years—long enough that some residents were second generation. It was walking distance to a library, cafes and restaurants, and was also on a bus line. Everyone I met there was friendly, plus it had the welcoming vibe I’d missed at my first choice. In early 2019, the wait for a one-bedroom apartment was four-plus years, but the next year I was able to switch to a two bedroom in a new building that should be completed this summer.
All the apartments in the new building are at least two bedrooms. Many, if not most, of the prospective residents are couples. The CCRC solution is attractive enough that some couples are moving to a one bedroom, while they wait for a two bedroom to become available. The wait list at my choice is now seven-plus years for a one bedroom, 10-plus for a two bedroom in the original building and 12-plus for a cottage. The CCRC’s wait list population is 65% couples and 35% single individuals. If you need a place with no wait list, probably your only hope—at least in my area—is a CCRC that’s just starting or possibly one that’s undertaking a major expansion. You also need to pass both a physical and financial check when moving in, another reason to plan ahead.
Before my expected move to the CCRC, I moved to an apartment and sold my house. I’ve been pleasantly surprised to find that I don’t miss the house, despite living there for more than 30 years. The move to a two-bedroom apartment meant I could keep my study, which certainly made the change easier. Another bonus: After paying the CCRC entry fee, I’ll qualify for a substantial medical deduction on this year’s taxes—which I’ll use to reduce the tax on a Roth conversion.
Kathy Wilhelm, who comments on HumblerDollar as mytimetotravel, is a former software engineer. She took early retirement so she could travel extensively. Born and educated in England, Kathy has lived in North Carolina since 1975.
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Kathy, we have done a great deal of research into CCRs, first for our parents and then for ourselves.
Unfortunately, there are many independent and assisted living arrangements where we live, but only a few with a nursing option. That’s an important consideration, especially after a hospital stay for rehab. I would rather return to familiar settings than a rehab far from family and friends.
Great post, Kathy. Thank you for contributing your thinking and experience. A CCRC is likely in my future as well.
NC must be far better than my state. There aren’t any facilities in my area that are well rated and accept medicare/medicaid. Any of the places that accept medicaid are poorly rated.
Sorry to hear that. NC may be an outlier – I looked into the situation in Portland for a friend and there seemed to be rather less regulation there. We do get a fair number of retirees, which may one reason, and the state used to be rather bluer than it is now. I think that the NC Continuing Care Residents Association, which I will join after I move in, is pretty active, too.
Thank you very much for this excellent post! My wife and I have been trying to persuade my mother-in-law to get on the list for a CCRC and this will be grist for the mill.
Here in Tucson, AZ there are numerous CCRCs and we have friends living in a couple of them but, while the waiting lists aren’t long, they’re all prohibitively expensive for us. The good news, such as it is, is that having lived as expats in Mexico for 5 years we’re very comfortable with moving into a CCRC down there if one or both of us need to. It should come as no surprise to anyone familiar with the cost of U.S. health care that such places have long been a booming business down there. At Lake Chapala alone (where we spent most of our time) there are at least a dozen places offering a fairly wide range of care and amenities. On average an independent living place with the option of 3 meals a day, access to skilled nursing care with an MD on call and help with basic tasks costs around $1200 a month down there. And the places are of course staffed with people for whom this kind of work pays quite well by local standards, from a culture that values the elderly much more than we tend to do.
Year-round great weather (highs in the 70’s to low 80’s and lows in the 50’s and 60’s year-round) and fresh produce are other plusses, but there are plenty of challenges too. Even so, we’ve had several couples we know where one spouse has either had a major health issue or suffered from dementia choose this option rather than quickly spending down their nest eggs and ending up in a Medicaid nursing home in the Midwest.
That’s an interesting suggestion, but I think I would have wanted to have spent some time in Mexico before making that decision. Of course, finances might not allow that. I did put considerable thought into whether I should return to England, but eventually decided to stay put. Apart from the exchange rate risk, the set-up there is rather different. I would have a much higher entry fee for many fewer amenities. If I needed additional care I could pay for it by the hour, but if I needed still more I would have to move. One reason I like the CCRCs in the US is that you can transition between levels of care on the same site.
Kathy, thank you for sharing your story. For many this whole area is obfuscated with many not knowing where to start or the pitfalls to look out for. I always learn a lot from your comments on HumbleDollar (whether it’s about travel, insurance or anything else) as someone who has “been there and done that” before me. You seem to be very good at research & your very helpful insight benefits all of us. Thank you.
Margaret, thank you for the kind words. I am happy I found this site. The daily email almost always includes something I find interesting and/or useful, although I admit to being an index fund aficionado. There are certainly plenty of potential pitfalls when researching CCRCs, that’s why I found Alvarez’ book so useful.
Thanks for this piece which resonated strongly. I really appreciate hearing the experiences of folks. I have a pickleball buddy who also is on his way to with his wife to a CCRC and he took a course from OLLI on CCRCs which was a mix of discussion and actually touring them-we intend to do that as well. Coincidentally, my wife and I are also in NC (Raleigh, area), love to travel, and are strongly considering CCRC. We have a close friend as well as a distant relative who is in a CCRC that sounds similar the one you ended up in. She also strongly advised us to look hard at the financials and get on the waiting lists which are long. We are in our mid 60s and intend to do so soon. I ordered the book and will look forward to reading it as well as your posts.
Hi Rob, sounds like a great course, sorry I missed it. I am in the same area as you, and would be interested to know what was said about my choice. I don’t want to post the name, as I once picked up an internet stalker on another board. If you would be willing to discuss this off-line, could you post a comment to my blog with your email address? It won’t be published, I have to approve new commenters.
Kathy, glad to see this contribution and I’ve likewise appreciated your articulate comments in the past. While my wife and I hope to “age in place” in our home of 35 years, it’s helpful to know something about the alternatives.
Thanks Andrew. I hope it works out for you. One thought – with wait lists so long, if this might be a possibility for you in the future, it wouldn’t hurt to get on a wait list or two now. The refundable deposit for my choice is $1,000. When you eventually make it to the top of the list, they will offer you the first apartment/cottage matching your criteria. If you choose to refuse the offer you lose $250 of the deposit but retain your place. Same for the second offer. After that you stay at the top of the list but there is no additional penalty. The deposit seems standard in this area, although one place wanted 10% of the entry fee.
Kathy, great article. Was just thinking the same thing about the deposit. My mother entered a commuity last year. She had thought about it for a few years and finally made the move. While she was thinking about it, she had deposits down at three places that she found acceptable, two of which she of course got back, rising on the list at all three.
You never know what’s going to happen to land you in a community sooner than you think, and you don’t want to be suddenly contemplating not “where do I want to live”, but “where can I get in.”
Having experience as some have had, I’d second “a few unannounced walkthroughs” before committing to any facility during its current operations. I applaud your review of the facilities financial standing, that was wise.
A friend and I were discussing this in the last 24hrs. Concerning his multiple DAV brother. He commented on his brothers last days when he went to visit him. He’d been there 3 years and in one day the entire facility’s staff, including the medical staffers, had been eliminated, reduced, or replaced.
That’s really upsetting. I hope to be in residence a long time, so just have to hope the situation will still be good in 15 years.
The most important item that Kathy shares here is one that many prospective residents tend to skip — inspecting the financials and covenants of a community VERY carefully, especially if it’s a new one. Many of the “promises” become null and void if the community is sold to a new owner or gets into financial trouble. And no matter how strict the state regulations, they can’t make a misled resident financially whole again.
Another thing my family found useful was to get documentation of the skilled nursing that was actually available onsite. The national nursing shortage has hit senior facilities especially hard, and the educational and licensing requirements for nursing assistants, for example, have been slipping in some areas of the country as CCRCs and LTCFs desperately scramble for enough medical staffing.
My elderly aunt and uncle live in incredibly wealthy Silicon Valley, yet every local senior community they’ve checked so far has flashed warning signs in finances and/or nursing. So they’re staying in their (one-story) house for the moment.
Congratulations, Kathy, on finding a great spot.
Agree about the staffing issue. Fees are going up because wages are going up. Still, I would rather have the CCRC dealing with the problem than have to find in-home aides on my own. My future home is forging a relationship with the local technical college in hopes of hiring students on graduation.
Kathy..it looks like you have done your homework very capably and checked all the boxes. You didn’t mention whether you had Long Term Care Insurance but depending upon your maintenance level of care, some portion may be covered.
A family relative entered an ACTS..not for profit..CCRC in Media, Pa. And was able to tap into her insurance.
No, I don’t have LTCi, I consider a CCRC an alternative and one that does not require payment until needed. However, my employer-sponsored Medicare Advantage plan does have unlimited coverage for skilled nursing. (I know, MA is not my preferred option, but this plan currently looks very good.)
An excellent article and very timely for my wife and I. We’re very early into starting to look at CCRC options for her mother (and later ourselves) and your article was rich with useful information. For example, while we knew many CCRC’s had long waiting lists, we weren’t aware of the physical check required. Yet another thing to be aware of and plan for. We hope to see more contributions from you on Humble Dollar going forward, including more about your experiences in a CCRC. Thanks!
Thanks! I really hoped it would be useful. Entry requirements do vary, and I think not all states have regulations like those in NC. Some CCRCs may allow entry directly to Assisted Living, but I’m not clear on what would happen if you then “graduated” from AL, as you would not have an apartment to which to return. I do highly recommend reading Alvarez’ book.
Thanks for writing this. I’ve always enjoyed your thoughtful comments on other HumbleDollar articles.
I also made the choice not to raise a child and frequently wonder about my options for care should I outlive my husband. I had no idea most CCRC’s had such a long wait list.
I wasn’t aware you lived in North Carolina. My husband and I hope to make it there at some point. It looks beautiful.
Thanks Kristine, I always enjoy your contributions, too. NC is beautiful – in spring and fall. The winters are generally OK, too, but the summers are very hot and humid. If you decide to visit leave a comment on my blog and maybe we can discuss it.
My wife is in a similar situation with back and leg problems which caused us to move from our house of 45 years to a 55+ condo without stairs to worry about and has curtailed our travel to some extent. Our hope is if necessary, assistance can be received at home as many of our neighbors do.
However, we have looked into a CCRC in the past and the cost seemed quite high. Several years ago the fee was $900,000 90% refundable but without interest paid. The monthly fee for two was $7,000 with two meals a day.
I am curious about your comment on tax deductibility of the entrance fee. I was unaware such a fee was considered a deductible medical expense.
Yes, you have posted those figures before. They are way higher than what I am paying, although my fee is, by my choice, non-refundable. Even so, it is very easy to find good CCRCs charging much less, although perhaps not in your area. How many did you investigate? BTW, a portion of the monthly fee is also tax-deductible.
Good luck finding good, affordable, reliable in-home care when you need it. There is a shortage of workers. Have you looked into who you would hire if you needed it right now?
A portion of your buy-in should also be tax deductible because it helps the CCRC provide lifetime care for those who exhaust their savings. My mother, who recently passed, was in such a facility. The annual deductible was calculated in two different ways by her facility because there remains some dispute in the tax world about how to calculate the deductible amount. Of course, with the higher standard deduction, the medical deduction may not be useful.
I just did a bit of research triggered by your article. Thanks for the info. Turns out a portion of a non-refundable entrance fee attributable to medical care is deductible. The exact amount must be determined by the CCRC and it is the aggregate for the entire community, not the individual.
Although it is an aggregate, tax deductions are allocated among residents based on monthly fees.
I agree with the article and comments and would add the following considerations –
You must have sufficient taxable income for a tax deduction to potentially produce a tax benefit that reduces your tax expense. The overall percentage of taxpayers who itemize was about 14% for recent tax year of 2019 but higher income taxpayers do itemize at a higher rate.
Assuming you have sufficient taxable income you currently need to have more than 7.5% of your adjusted gross income for qualified medical expenses to be eligible to itemize. For those who make generous deductible charitable contributions and also have high medical expenses this additional medical expense may result in the ability to deduct them as an itemized item, but for those who do not have large itemized deductions their tax benefit from the additional CCRC medical expense may be a small or no tax saving benefit as the standard deduction may be more beneficial.
Moving into a CCRC likely means no available home mortgage interest or property tax deduction. Deductible state income tax may be small as many states, like North Carolina, do not tax social security benefits and the TCJA caps other deductible taxes at $10K even if you do itemize,
The Tax Cuts and Jobs Act (TCJA) of 2017 provisions that became effective in 2018 sunset at the end of 2025. I expect congress will make major tax law changes, at the last possible minute, and the tax benefit for itemized deductions after 2025 seem uncertain to me.
Kathy appears to be making an informed life decision by choosing to move to a CCRC for the non-tax reasons she cited.