FREE NEWSLETTER
Go to main Forum page »
As I have written recently we have begun investigating CCRCs. I am curious as to what other bills that you paid when you owned a house are eliminated or reduced, and if reduced by what percentage. Also what additional charges/bills might be incurred from the CCRC other than the obvious monthly fee.
Ideas I’m thinking may be eliminated are expenses such as property taxes, fuel for heating/cooking etc. is electricity included in the monthly charge. How many meals etc. I would assume these vary by facilities/contracts etc. I assume most get renters insurance which I would figure is less expensive than homeowners insurance.
Just curious, and thanks for any input which might be provided.
Look for a non-profit, financially sound CCRC. There are many, if you do your due diligence. Be wary of situations like these.
Isn’t it the case that while the individual may not pay many of the expenses listed directly, they are certainly paying them within their monthly fee and lost interest on entry fee. Expenses didn’t go away, they are just paid differently. It’s like saying healthcare is free, when it is paid for through taxes.
The real test is annual aggregate outflow compared between before and after living in a CCRC.
Dick the nexus of my question was to find out when someone is in a CCRC how do their other expenses change such as no electric, water/sewer, property taxes etc.. Essentially what do they still have to pay for beyond their monthly payments to their facility.
Hope the replies have helped, but you really have to look at the financial disclosure statements for each CCRC individually. I’ve heard of some that charge for parking, or for under-cover parking, for instance. Some cover internet and some don’t.
If you are in a Type A or Type B some of the monthly fee is considered prepaid medical expenses, so the comparison is not exact. (In a Type A your monthly fee is the same regardless of level of care: in a Type B you pay more, but below market rate, for higher levels of care.) Also, I am now essentially paying rent, whereas I paid my mortgage off years ago, so previously was living rent-free. The equity in the house largely covered the entry fee, so no lost interest. Also, no ongoing maintenance costs. There are significant non-monetary advantages to living in a CCRC as well.
The equity used for entry fee will be held for many years (hopefully) and no interest paid on it, right? so that seems a loss. Even if you had kept a home, the equity would probably have increased.
But I get it, there are advantages to a CCRC beyond finances.
My entry fee is non-refundable (my choice). It has been accruing to the CCRC at the rate of 2%/month. Much of it is also considered a pre-paid medical expense – I paid no taxes the year I moved in because of the size of the medical deduction.
While the equity in my house would probably have increased, so would the maintenance costs – it was over 30 years old. I lived alone, and some point I might have had to try to arrange expensive in-home care or an emergency move to whatever facility had space. The CCRC is an alternative to Long Term Care Insurance.
“The CCRC is an alternative to Long Term Care Insurance.”
Since LTC policies were not affordable for us when they first came out, and then even less so since, we do not have a policy.
I have also come to the conclusion above.
Because our CCRC is a non-profit I look at our entry fee as contributing to its financial health. If our CCRC was paying us interest on our 90% refundable entry fee then it might have to increase our monthly fee to cover the cost of the interest payments.
Non-profit doesn’t mean it can’t pay management high salaries or spend unnecessarily. It just means they spend to the point of no excess. I’m not saying a CCRC does that, but non-profit doesn’t mean what some people think it does.
I’m well aware of that. University salaries for presidents and coaches are just one example.
A good CRCC, like mine, has a resident-led finance committee with participation by management, plus a financially savvy resident on the board. The governing statute in NC was updated this year, after a campaign by the state CCRC Residents Association, to require additional financial reporting. Yes, things can go wrong, and residents need to keep an eye on things, but I’ll take a non-profit over a for-profit every time.
I understand your position, but I was on the boards of several non-profit health plans. I noticed decision making in non-profits was just not as tight or sharp as it might have been if there was a profit motive. The charity mindset just doesn’t work the same as the profit one. I think that’s true in many organizations.
Being concerned more about the bottom line isn’t always bad. I think you see that in colleges too. The head football coach at UNC earns $10,000,000 plus bonuses. That’s a pretty good non-profit profit for him. The head of the American Heart Association makes over $4 million a year.
Seeing how my parents for profit assisted living facility went bankrupt and gave residents a one month notice to move out I think your arguments that for profits are better run because they want to make a profit has holes in it. Luckily, but not really, my parents had to move into a nursing home due to their decline before they would have been forced to move out by the “well run” for profit management company.
BUYER BEWARE of any for profit facilities. Their only reason for existence, and their only purpose is to make money for their stock holders. The residents are but an inconvenience for them.
And couldn’t that happen with a non-profit? I’ve seen non-profits go bankrupt.
So does ours. Our treasurer was a senior executive at JP Morgan Chase and has a doctorate in finance from Wharton. He has full access to our CCRC’s finances. NY also requires annual financial reporting.
You are correct that the monthly fees cover several ordinary expenses. For instance, our fees provide free cable. We still stream most of the shows we watch, but the cable is nice for network tv. Also, at least in our CCRC, some of your monthly fee amount will be tax deductible. Also, the entrance fee (depending on the amount you contract for a refund) is largely tax deductible.
Why would this comment get two 🔻 A simple observation. Am I wrong?
We have been in our CCRC in Florida for three months. It is a great lifestyle. Previously, we spent seven years in a Sun City near Atlanta. We no longer pay the HOA fees, pest control, most of the utilities, home owners insurance or property taxes. We do pay electricity and renters insurance. I believe our auto insurance is slightly lower.
Over all, since we had no mortgage payments or monthly debt payments, I would say our expenditures are higher, but reasonable. Since we are living in independent living, we have no meal plan But, we do eat at the facility from time to time
Interesting that you have no meal plan in Independent Living. All of the CCRCs I looked at in NC, including the one I live in, had meal plans in IL. Just shows that you can’t really generalize about them.
I forgot to mention that our CCRC only has type B contracts. So we do maintain our long term care insurance. The rate charged for care is discounted, also.
One can certainly buy a meal plan. They have a 15 meal plan and one with 30 meals. Meals run $15.60, which I see as a good price. The plans do have a slight discount per meal. We live in villas next to our main facility, so it is an easy walk to the main building to dine. My wife and I discuss getting a plan, but have not bought one yet. Our main building is a tower, with about 7 floors of residences. I believe that the people living there might have meal plans, even those living independently. We do participate in some meals, especially taco night. The Thanksgiving buffet was excellent
That’s a different system. Dining is included, to some extent, in my monthly fees. I get a set number of dining points per month, which don’t roll over (unless I’m gone for more than two weeks). I can use the points for food in five different dining venues. It works out to 15 points a day. Very good filet mignon in the more upmarket of the sit down restaurants is 30 points, while take out Waldorf chicken salad from one of the cafes is 6 points. If I exceed my points allowance the cost is added to that month’s bill.
I agree. This is the first CCRC I have heard of that doesn’t have a meal plan of some sort. My understanding is that this is done to ensure a sufficient number of residents will dine in the facility each day to allow for ordering food at a bulk discount and to allow for more stable staffing in the kitchen and dining area.
We moved from a Florida house into a nonprofit Florida CCRC three years ago and have been very happy with the decision.
Other people have covered many of the inclusions. Areas we used to spend $ on with a house (which went away):
Landscaping (tree trimming, plants, yard treatments, sprinkler system repairs & maintenance)
Weekly lawn servicing man
Monthly Pool man
House maintenance (painting, repairs, roof replacement, pool cage repairs, etc etc)
HOA fees (some cover pool & yards – ours did not)
Termite treatments (and cost of repairs after infestation)
Hurricane damage repair (below deductible)
Lightning strike repairs (below deductible)
Homeowners insurance (rental insurance now)
Plumber
It’s nice to leave all that to our excellent maintenance staff.
The down vote was accidental! I guess I reacted because we had a $400 furnace repair and paid $383 for a gutter cleaning this week!!
You can undo it by clicking on the up arrow.
I forgot about the termite insurance and the HOA fees, although mine were low. I also had a quarterly pest control service.
Well, my monthly expenses have gone up, but I am getting a lot in exchange. There are also non-monthly expenses, like house maintenance, which go away. (I feel like that sentence should be in bold with asterisks!) Since every CCRC is different, you have to look at the details for any you are considering, but this is a rough list for mine.
Rent/mortgage – I paid my mortgage off in 2001, so clearly this is a large increase. I spent over two decades living rent free.
Property taxes – my CCRC is non-profit, so it doesn’t pay taxes.
Insurance – my renters insurance is less than a quarter of my homeowners. Make sure you check the valuation of your contents.
Utilities – electricity (no gas in apartments), water, sewage, trash and recycling are included.
Internet and TV – additional required payment, currently $75/month.
Telephone – I think a landline equivalent may be part of the internet package but my cell phone is additional and up to me.
Cleaning – included. At my facility it’s weekly although I have opted for bi-weekly. I had my house cleaned every three weeks. It includes changing and washing bed linens if desired.
Yard service – included. All grounds planting, pruning, leaf collection and other maintenance is handled by CRCC staff or contractors.
Maintenance – all building maintenance is included as is service for appliances provided by the CCRC. For instance, if the filter in my fridge needs replacing I file a maintenance request. The smoke and CO2 detectors are checked regularly, as is the alarm system. I have been very pleased with the guy who responds to my requests.
Transport – aside from outings for meals and performances there are weekly shopping trips plus transport to medical appointments. Parking is free and in my case is in an underground garage.
Medical – we have an on-site clinic staffed by gerontologists, plus visiting audiologists and podiatrists. Each year I get 14 free days in Skilled Nursing.
Emergencies – we are issued an “alert” pendant at move-in. Pushing this summons maintenance and nursing. We are instructed to keep a plastic bag in the fridge with emergency contact information, DNR and MOST if we have them, and list of medications.
Taxes – part of each monthly payment is considered pre-payment of medical expenses and is tax-deductible. Ditto entry fee.
Exercise – we have a pool, two fully-equipped exercise rooms, a sports court, a spin room etc. I haven’t counted the exercise classes lately, but there a lot.
Food – I get a monthly allowance of dining points. We have a range of dining facilities – the most expensive would take more than a day’s worth of points for one meal, while you might get two at another. Alcohol is available but is paid for separately. If I’m away for more than 14 days some points are carried forward. Since I don’t want to get dressed and socialize before my second cup of coffee I always fix my own breakfast. I still have grocery bills, I’ll have to check to see how much lower they are.
I think that is all the financial stuff. The other benefits are priceless.
While non-profits are exempt from income taxes they may be subject to property taxes. My mother was in a Type A facility in Iowa that had tp pay property taxes.
Good catch. I was certainly under the impression that we didn’t pay them. I’ll have to ask. Under NC law we would qualify if our operations were considered “charitable”. There is a reference in the Disclosure Statement to increasing the monthly fee if the CCRC has to pay “ad valorem” taxes.
Our nonprofit CCRC includes a property tax charge on the monthly billing statement, broken out so we have a total at the end of the year to use to file for a deduction on taxes (we itemize). The CCRC management also files for Florida Homestead Exemption for each of us to reduce that tax.
At my nonprofit CCRC the following are included in the monthly fee. Readers’ expenses before moving to a CCRC will vary, so I won’t try to predict how much money an individual will save:
–housing
–real estate taxes (the CCRC owns the residence and pays the tax)
–water
–sewage
–electricity
–heat
–whole-house air conditioning
–full meal plan, with partial rebate if choose one of the lower plan tiers; away allowance if away for more than 13 days in a month
–trash collection
–recycling collection
–composting collection
–Wi-Fi internet; IT employee handles network-related issues
–resident volunteers solve residents’ other tech problems, as does a remote tech service paid for by the CCRC
–surprisingly extensive basic cable
–on-site lap and therapy pools, fitness rooms, exercise classes, etc.
–on-site health center for medical office visits, order prescription medications: services billed to Medicare traditional and Part D, or HMO (e.g., Advantage)
–medical director and service providers appointed for stays in the on-site care center for assisted living, skilled nursing, memory care: office visits, distribute prescribed medications, medical review, hospital attendance, referral to specialists, etc.
–on-site access to other services covered by insurance: physical therapy, podiatrist, blood draws for lab work, etc.
–on-site access to dentist: possibly covered by insurance (e.g., Medicare Advantage), otherwise billed directly to individual
–on-site access to salon (bill added to monthly statement), free art workshops, etc.
–insurance coordinator who manages all medical insurance billing
–use of standard CCRC-owned equipment: refrigerator, microwave, dishwasher, garbage disposal, washer/dryer, ceiling fans, overhead lights; repair or replacement as needed; plus other maintenance requests, e.g., raccoons above ceiling, shower and bathroom flooring replaced after leak
–weekly bed and bath linens exchanged and laundered (not required; I get their towels but do my own bed linens)
–biweekly housekeeping: cleaning bathrooms and kitchen, vacuuming, etc.
–redo flooring and wall paint every 10 years
–approx. 25% of monthly fee and 25% of original one-time entry fee designated available as medical expense tax deduction if itemizing
–outside grounds keeping and residence maintenance: lawn service, snow removal, sidewalk, roof, siding, etc.
–open parking lot (garage costs extra)
–storage room (mine is 5’x6′)
–regularly scheduled transportation to local and some more distant sites
–individually scheduled transportation to in-county Medicare-covered appointments
–volunteer drivers to Medicare-covered appointments outside the county (for small annual fee paid to resident transportation committee)
–volunteer medical companions for medical appointments requiring accompaniment (colonoscopy, cataract surgery, etc.)
Not included in monthly fee: renters insurance (required); telephone.
I’d like to hear more about the “raccoons above ceiling.”
While the cottage was unoccupied before I moved in, a raccoon chewed through the soffit and got into the space between the ceiling and the roof over the living room. Thankfully not over the bedroom. There’d been a raccoon above the ceiling in the old house where my top-floor apartment was before I retired, so I recognized the sound: noticeably louder than that of mice skittering, especially at night. So I submitted a work order. The facilities worker climbed up through the laundry room access panel with a big box cage and some bait, checked next day, no joy. Came back with a different bait, still nothing. Third time lucky — peanut butter, I think. All quiet on the overhead front for a few weeks, then another raccoon arrived, same place. Quicker result this time, with the right bait on the first try. Then the crew replaced all the soffits with unchewable metal above the covered walkway (a.k.a. raccoon runway) connecting our row of cottages. Winter’s coming soon; I hope the soffits hold.
Thanks for sharing the story. It’s a great illustration of being able to turn in work orders for all sorts of maintenance requests when residing in a CCRC, without having to pay the tab.
We once had a backyard mulberry tree that attracted raccoons who would over-indulge, get drunk, and fall out of the tree. Luckily they never noticed our soffits.
My Dad lives in a CCRC and pays the monthly fee, an electric bill, a cable TV bill and a phone bill (he still has a land line!) He has renter’s insurance instead of his homeowner insurance. They provide one meal a day as part of the monthly fee and charge about $8 for additional meals.
He moved from a four-bedroom house on an acre of land to a one-bedroom apartment. His electric bill is less than half what it was, renter’s insurance is a tenth of what he was paying for homeowner’s, he saves thousands on maintenance.
I just investigated a local CCRC. They emphasized for the monthly fee of $7,000 (for two) virtual all expenses were included, meals, all utilities, cable and WiFi, cleaning every week, local transportation as needed. Except for buying food if desired, it seems the fee, (rather hefty in this case) was the total budget. Of course, all home maintenance was also included.
My parents didn’t live in a CCRC, but did live in a high end Assisted Living facility. Pretty much all expenses except for the rent were covered by the ALF except for basic supplies and a few clothing items during the year. Biggest expenses that went away: Food, Home maintenance, and auto (it was sold). In general monthly expenses were higher with the rent, but the lifestyle was a huge upgrade over what they had previously living at home.