Continuing Care Retirement Communities

[StateOfMyHead]

Have you considered a CCRC?
I have no interest in protecting inheritance and a strong aversion to presenting to the ED on a holiday weekend to start the Geri-psych journey or emergency nursing home shopping when either spouse or myself are no longer able to live in our home safely. There a few nice communities in my area and when I have cared for the residents in the ED they are eager to return.
I would appreciate your thoughts.

[StarTrekDoc]

Can you expand on what these entails and difference between an assisted living community that has entire spectrum from independent living to total memory care

[StateOfMyHead]

Can you expand on what these entails and difference between an assisted living community that has entire spectrum from independent living to total memory care

Same thing I think. I don’t really get the appeal of those without the higher level of care options
.

[Tim]

https://houstonheights.watermarkcommunities.com

https://www.houstonchronicle.com/business/real-estate/article/Hines-partnership-debuts-luxury-retirement-16680694.php

Big business.
• The pricing models vary. Some have a substantial upfront buy-in and lower monthly. Some have a lower buy-in higher monthly.
• The downside is the management can and does change (the quality increase/decrease).
• You are in a community. Some people will feel very free to give you advice or reprimand you. Talking too loud, not parking “right”, their opinions on just about anything.
•Likely as an “early resident” you and spouse will not find a ton of people that fit your age/activity profile.

I don’t think they have a way for a delayed future resident.

[The White Coat Investor]

While I agree it's best not to wait until well past the time to get this sort of assistance when it is needed, I would personally hate to live only around people my age. It would feel to me like I was just waiting around to die. As I get older my friends, at least the ones I go out and do my favorite activities with, get younger and younger! They used to be my age up to 30 years older. Then they were 10 years younger to 20 years older. Then they were 20 years younger to 10 years older.

But then again I expect to hire in the help we need and "age in place" and we can afford to do so. Most people can't. It's really expensive to have 24 hour care in your home because it requires 3 or 4 full-time employees. But there are still people who can afford it.

[Sigrid]

In my experience as both a geriatrics-trained emergency doc and as someone whose parents bought into one of those not too long before my father's health took a catastrophic tumble, they are the best option out there for retirement communities. (We'd all love to be able to safely "age in place" no matter what our medical needs are, but the reality is most people, even retired doctors, will not be able to afford that.)

That doesn't necessarily mean you need to buy in early, though. Let your baseline health status guide you, and do your research ahead of time.

[StateOfMyHead]

In my experience as both a geriatrics-trained emergency doc and as someone whose parents bought into one of those not too long before my father's health took a catastrophic tumble, they are the best option out there for retirement communities. (We'd all love to be able to safely "age in place" no matter what our medical needs are, but the reality is most people, even retired doctors, will not be able to afford that.)

That doesn't necessarily mean you need to buy in early, though. Let your baseline health status guide you, and do your research ahead of time.

Thank you for sharing this valuable insight especially the caution to resist pulling the trigger too early which is where I was leaning. One of my hospitals is in an affluent area where many have the resources to attempt to age in place which is all well and good until someone becomes demented and has been working out with a personal trainer.

[Lordosis]

While I agree it's best not to wait until well past the time to get this sort of assistance when it is needed, I would personally hate to live only around people my age. It would feel to me like I was just waiting around to die. As I get older my friends, at least the ones I go out and do my favorite activities with, get younger and younger! They used to be my age up to 30 years older. Then they were 10 years younger to 20 years older. Then they were 20 years younger to 10 years older.

But then again I expect to hire in the help we need and "age in place" and we can afford to do so. Most people can't. It's really expensive to have 24 hour care in your home because it requires 3 or 4 full-time employees. But there are still people who can afford it.

"That's what I love about these high school girls, man. I get older, they stay the same age."

[Tim]

These facilities actually have planned activities every day. They will welcome visitors for a number of times. Strongly suggest you arrange several visits prior to committing to any facility. If they don't feel like they fit in, well you might have regrets. What you actually want is for them to feel like I might as well stay with friends. It is helps if you actually have 2 places to choose from. A choice between positives helps. You can do this in advance. Thus letting them decide it's time.

[Jenn]

Resurrecting this post as I do MIL's taxes: tax considerations for CCRC.

If the CCRC has a buy in, a certain % of that is actually money paid for your future medical expenses, and is deductible as a medical expense on line 1 of schedule A if you itemize (and you will if your buy in is big enough). Also a % of your monthly fees may be deductible in the same manner. MIL's retirement village gave her the annual letter from their CPAs advising the allowable amount (based on how much of funds in from all residents are spent on medical care for current residents- ie not my MIL but use that as a predictor of amount of her payments are for insurance for future medical care). She doesn't even have enough taxable income (FIL's agent orange and other military issues make most of her income tax free) to make full use of the upfront deduction (any CPAs know of a way to use the rest next year?) but any way her tax bill is 0 with the 40% of her buy in included as a medical expense.

Had I been involved and researching this before January I would have suggested she boost her 2022 total income with a larger IRA withdrawal, perhaps doing a Roth conversion with it at 0% tax rate if I calculated the perfect amount to withdraw. Something I will keep in mind if we buy into a CCRC someday.

NB beware taxes for heirs. Her system is a "FULLY AMORITIZING 0% REFUNDABLE CONTRACT" a very confusing term- she gets back- for up to 3 years- a portion of her buy in if she moves, and heirs get back a portion in that time frame if she dies. The amount ascribable to the deduction taken initially on the total paid in expecting no refunds may therefore be taxable. In our case the worst case tax scenario is that I have saved MIL $4K in taxes for 2022, and in 2023 we pay $14K in taxes or so to get back an extra $60K of her estate if she died tomorrow given our different tax brackets. But I would see if the IRS accepts that she only took about half of her allowed deduction for it... (I didn't bother making her itemized deductions double what her total income is).

https://rodgers-associates.com/blog/is-your-entrance-fee-deductible/#:~:text=But%20what%20about%20entrance%20fees,as%2 0an%20advance%20medical%20payment and https://www.casmoneymatters.com/blog/tax-breaks-for-continuing-care-retirement-communities seemed worth saving in my notes about it.

[Tim]

Resurrecting this post as I do MIL's taxes: tax considerations for CCRC.

If the CCRC has a buy in, a certain % of that is actually money paid for your future medical expenses, and is deductible as a medical expense on line 1 of schedule A if you itemize (and you will if your buy in is big enough). Also a % of your monthly fees may be deductible in the same manner. MIL's retirement village gave her the annual letter from their CPAs advising the allowable amount (based on how much of funds in from all residents are spent on medical care for current residents- ie not my MIL but use that as a predictor of amount of her payments are for insurance for future medical care). She doesn't even have enough taxable income (FIL's agent orange and other military issues make most of her income tax free) to make full use of the upfront deduction (any CPAs know of a way to use the rest next year?) but any way her tax bill is 0 with the 40% of her buy in included as a medical expense.

Had I been involved and researching this before January I would have suggested she boost her 2022 total income with a larger IRA withdrawal, perhaps doing a Roth conversion with it at 0% tax rate if I calculated the perfect amount to withdraw. Something I will keep in mind if we buy into a CCRC someday.

NB beware taxes for heirs. Her system is a "FULLY AMORITIZING 0% REFUNDABLE CONTRACT" a very confusing term- she gets back- for up to 3 years- a portion of her buy in if she moves, and heirs get back a portion in that time frame if she dies. The amount ascribable to the deduction taken initially on the total paid in expecting no refunds may therefore be taxable. In our case the worst case tax scenario is that I have saved MIL $4K in taxes for 2022, and in 2023 we pay $14K in taxes or so to get back an extra $60K of her estate if she died tomorrow given our different tax brackets. But I would see if the IRS accepts that she only took about half of her allowed deduction for it... (I didn't bother making her itemized deductions double what her total income is).

https://rodgers-associates.com/blog/is-your-entrance-fee-deductible/#:~:text=But%20what%20about%20entrance%20fees,as%2 0an%20advance%20medical%20payment and https://www.casmoneymatters.com/blog/tax-breaks-for-continuing-care-retirement-communities seemed worth saving in my notes about it.

Interesting. As far as itemizing, you points about timing of a buy in and/or Roth conversions make sense.

[StateOfMyHead]

Resurrecting this post as I do MIL's taxes: tax considerations for CCRC.

If the CCRC has a buy in, a certain % of that is actually money paid for your future medical expenses, and is deductible as a medical expense on line 1 of schedule A if you itemize (and you will if your buy in is big enough). Also a % of your monthly fees may be deductible in the same manner. MIL's retirement village gave her the annual letter from their CPAs advising the allowable amount (based on how much of funds in from all residents are spent on medical care for current residents- ie not my MIL but use that as a predictor of amount of her payments are for insurance for future medical care). She doesn't even have enough taxable income (FIL's agent orange and other military issues make most of her income tax free) to make full use of the upfront deduction (any CPAs know of a way to use the rest next year?) but any way her tax bill is 0 with the 40% of her buy in included as a medical expense.

Had I been involved and researching this before January I would have suggested she boost her 2022 total income with a larger IRA withdrawal, perhaps doing a Roth conversion with it at 0% tax rate if I calculated the perfect amount to withdraw. Something I will keep in mind if we buy into a CCRC someday.

NB beware taxes for heirs. Her system is a "FULLY AMORITIZING 0% REFUNDABLE CONTRACT" a very confusing term- she gets back- for up to 3 years- a portion of her buy in if she moves, and heirs get back a portion in that time frame if she dies. The amount ascribable to the deduction taken initially on the total paid in expecting no refunds may therefore be taxable. In our case the worst case tax scenario is that I have saved MIL $4K in taxes for 2022, and in 2023 we pay $14K in taxes or so to get back an extra $60K of her estate if she died tomorrow given our different tax brackets. But I would see if the IRS accepts that she only took about half of her allowed deduction for it... (I didn't bother making her itemized deductions double what her total income is).

https://rodgers-associates.com/blog/is-your-entrance-fee-deductible/#:~:text=But%20what%20about%20entrance%20fees,as%2 0an%20advance%20medical%20payment and https://www.casmoneymatters.com/blog/tax-breaks-for-continuing-care-retirement-communities seemed worth saving in my notes about it.

Good information, thank you.

[Hank]

With all this global warming, I hope the weather stays cold enough for an ice floe when I need it. With wine and cheese. And maybe pickle ball.

[Tim]

With all this global warming, I hope the weather stays cold enough for an ice floe when I need it. With wine and cheese. And maybe pickle ball.

•“In the 70s, they said there'd be an Ice Age”
•“The CLEAN collection is hand-picked and rigorously reviewed for scientific accuracy and classroom effectiveness. ”
•” Is it Safe to Jump into the Snow after a Hot Tub Soak?”
•Not too much cheese.

[jfoxcpacfp]

These facilities actually have planned activities every day. They will welcome visitors for a number of times. Strongly suggest you arrange several visits prior to committing to any facility. If they don't feel like they fit in, well you might have regrets. What you actually want is for them to feel like I might as well stay with friends. It is helps if you actually have 2 places to choose from. A choice between positives helps. You can do this in advance. Thus letting them decide it's time.

I’m interested in this thread; although I don’t have any interest in moving, my mom and stepdad may at some point. But what does your last sentence mean? Iow, who is this “them” who get to decide when “it’s time”? Sounds kinda dystopian…