Getting in Line

Howard Rohleder

WE RECENTLY MADE a down payment on our next home. After several months of research, we joined the waiting list for a continuing care retirement community, or CCRC.

We’re in our late 60s and only relocated to our current home four years ago. It’s in a metropolitan area two hours’ drive from our daughter and her young family. We know that perhaps 10 years or so from now, we’ll want to be closer to her, so we looked at CCRCs near where she lives.

We have some familiarity with the CCRC concept. Both of our parents lived in CCRCs and had positive experiences. I serve on the board of directors of a CCRC where we live now. I previously shared thoughts on choosing a CCRC in a HumbleDollar article.

We solicited ideas for which CCRC campuses to visit from some of my contacts. Ultimately, we visited three. There were things to like about each. Our preference was to find a type A community—those that lock in the monthly fee, regardless of the level of care you need. We only found type C communities, where you pay for each level of care at market rates. Type C communities are far more common due to the financial risk that type A communities assume.

All three facilities we visited had acceptable accommodations and amenities. They all appear to have the financial strength for the long haul. We screened for those things before we visited and we weren’t disappointed. In joining the waiting list, one of our intentions is to monitor the organization. Does it continue to maintain its facilities? Does it maintain its financial strength?

As the real estate cliché goes, our final selection was based on three things: location, location, location. Of the three we visited, our choice is closest to my daughter’s house and within a mile or so of one of the hospitals where she works. The proximity of that hospital, its reputation, and all of the associated doctors’ offices and medical facilities were important factors in our decision. On top of that, there was a bustling suburban neighborhood with shops and restaurants nearby.

In the meantime, the waiting list is a form of insurance. For the type of independent villa that we favor, the wait is estimated to be four years. This has grown from about two years when we visited late last year. This is not uncommon with CCRCs.  The over-65 population is increasing much faster than the construction of new CCRCs or additions to existing CCRCs. The demand for the better facilities is increasing, and it’s expected to continue to increase. When I called to make appointments to visit, I was questioned about how soon we were thinking of moving. There was no point in visiting if we had an immediate need.

One of the criteria to consider before joining a waiting list: What happens when you get to the top? We don’t expect to be ready to move in four years. For the facility we chose, you simply “float” at the top of the list. If the CCRC makes us aware that a villa is available, we can say no and still remain at the top of the list indefinitely. I consider this insurance: If our health were to change and CCRC living was desirable at any point after we reach the top of the list, we have a place that’s available to us. Neither we nor our daughter will need to scramble to find some place to land.

The cost of joining the waiting list was $5,000. Of that, $4,500 is refundable if we change our mind. The full $5,000 is applied to our entrance fee. It’s also fully refundable if we die without moving in. The “insurance” cost is the forgone interest earnings or, if we decide to go elsewhere, $500 plus the forgone interest. As a person who likes to plan ahead, this strikes me as a small price to pay.

Howard Rohleder, a former chief executive of a community hospital, retired early after more than 30 years in hospital administration. In retirement, he enjoys serving on several nonprofit boards, exploring walking paths with his wife Susan, and visiting their six grandchildren. A little-known fact: In May 1994, Howard was featured—along with five others—on the cover of Kiplinger’s Personal Finance for an article titled “Secrets of My Investment Success.” Check out his previous articles.

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