Think moving to a retirement community is going to be just like moving from one house to another?
The retirement-home industry has a set of lease arrangements and fee structures unlike most others, and the system can be confusing to those who are introduced to it when theyre planning to moveor to move an elderly parent. Senior housing managers here recommend that those shopping for such quarters look closely at several financial aspects of a retirement community before committing to move into one.
These communities are as different as towns on the interstate, says Jeffrey Bair, executive director of Waterford on South Hill, at 2929 S. Waterford. Some people would like to live in one town, but wouldnt want to live in another, and these communities are the same way.
A typical first dwelling for someone whos entering a retirement community might be some type of independent-living quarters. Many communities here offer both free-standing homes, called cottages, and apartment units.
Often, independent-living quarters are made available through whats called a lifetime-leasehold arrangement, in which a resident pays an initial fee to move into a home. The fee sometimes is called a buy-in, rather than a lease payment. The resident gets back a large amount of that money at some point after vacating the residence, though that timing varies.
Other independent-living quarters are offered with a simple lease, rather than a buy-in arrangement. Residents of independent units also typically pay monthly fees for such various services as yard care and maintenance.
Buy-in costs vary widely, even within the same retirement campus.
For instance, at Rockwood Retirement Communities Rockwood South campus, at 2903 E. 25th on the South Hill, a new resident seeking an independent-living unit often pays a buy-in fee that ranges from about $35,000 for a small apartment to more than $400,000 for a large house, says Alan Curryer, the organizations CEO.
Rockwood also owns Rockwood at Hawthorne, at 101 E. Hawthorne on Spokanes North Side, but that campus doesnt have some of the high-end homes available at Rockwood South, so the buy-in range doesnt climb as high.
Other retirement communities have similar offerings.
Monthly service fees at independent-living facilities range widely as well, from a couple hundred dollars to more than $3,000.
< p align=center>Buying in
In a buy-in arrangement, a resident who leaves an independent-living unit typically will receive back between 75 percent and 90 percent of their initial buy-in amount, but when the resident gets that money back varies greatly.
Norm Lunt, administrator at Orchard Crest Retirement Community, at 222 S. Evergreen in Spokane Valley, says an independent-living resident who leaves a unit at that complex will receive 80 percent of the buy-in outlay back once another party agrees to take the vacated unit. Demand for such properties has been healthy, and the units often fill quickly, so vacating residents usually havent had to wait long for their money, Lunt says.
At Rockwood, residents can opt either for a refundable or a nonrefundable buy-in agreement, Curryer says. The nonrefundable option costs a resident on average 45 percent less than the refundable option, but the resident gets nothing back when he or she leaves the unit. With the refundable option, a resident receives 80 percent of the amount paid in the upfront buy-in, but doesnt get that money until leaving the retirement community altogether, even if he or she first moves into an assisted-living or skilled-nursing unit there for a period of time.
Frequently, Curryer says, residents who sign up for a buy-in option expect to live in the community until they die, and view the arrangement as a conservative way to secure a portion of their estate for their heirs, who would get the money from the buy-in when the resident dies.
Some retirement communities have shared-equity plans through which residents can opt to receive a percentage of the units market value at the time they leave the unit, rather than a percentage of their initial buy-in amount.
For instance, at Rockwood Lane retirement community, at 221 E. Rockwood on the South Hill, a resident receives 90 percent of a living units resale value once he or she vacates the unit, says Jean OKeeffe, department manager of G&B Real Estate Services Inc.s residential division, which is the property manager for Rockwood Lane.
At Waterford, residents who buy into living units must choose up front whether they want to receive 80 percent of the initial buy-in amount upon leaving or 75 percent of the units market value at the time they vacate a unit, Bair says.
Theoretically, a resident could get less back by banking on future market value, but the current market would have to change dramatically for that to happen, Bair says. Waterford typically has a waiting list of people who want to get into those living units, he says.
In 10 years, to have a units value go up 25 percent is not unusual in this market, he says.
Retirement communities monthly feesand the services they covervary as widely as the lifetime-leasehold agreements.
In most cases, monthly fees cover maintenance, security, and yard care, and many arrangements also include weekly housekeeping and one meal a day, as well as free involvement in on-site activities, such as fitness classes and social functions.
Some communities try to distinguish themselves by including unique features. For example, Rockwood gives its residents 10 free days of skilled-nursing services a year, Curryer says. If a patient has surgery or breaks a bone and needs additional help for a few days, thatd be covered by the service. Otherwise, such care typically would cost about $200 a day, he says.
Bair says Waterford has unbundled its service package and allows its residents to choose what services to pay for. About 90 percent pay for one meal a day and weekly housekeeping, he says. Other available options include additional meals and cleaning, laundry services, and light personal assistance.
Bair suggests that people who are considering moving into a retirement community research carefully what services are included in the monthly price, and how much additional services would cost if needed later.
Retirement-home operators say moving from an independent-living unit to assisted-living quarters on the same campus typically occurs with little, if any, upfront expense, though the monthly costs would be higher. Retirement communities here typically dont charge a buy-in fee for assisted-living units, though some charge a sort of admission fee of between $1,500 and $7,500 for first-time residents who move directly to an assisted-living unit.
Monthly rates for assisted-living units typically run roughly $1,000 more than what a resident would pay for a comparable independent-living unit. Skilled nursing typically is in the neighborhood of $150 to $200 a day.
Even if someone is just shopping for an independent-living unit, a prospective resident should look at a complexs offerings in assisted living and if available, skilled nursing, Curryer says.
Also, he says, a senior should ask what happens if he or she runs out of money. Some nonprofit operators have charitable foundations that support residents who cant continue to pay their monthly bill, but many for-profit operators dont have such provisions, he says.
Also, if a resident is going to a community that doesnt have skilled nursing, its important to find out what level of care is available at the assisted-living level, Curryer says. In some cases, he says, residents are required to leave an assisted-living facility when they surpass a certain level of care, and sometimes theyre not aware that can happen.
Bair adds that senior-housing shoppers should be leery of any retirement community that isnt forthcoming with information about fees charged or about the operators financial strength.
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