More seniors finding peace of mind, lifelong care at continuing care communities

(BPT) – Are you worried you might one day outlive your retirement savings? Running out of money is a common concern, and the sad reality is it does happen to some people. The Administration on Aging predicts the number of Americans age 65 and older will reach 98 million in less than 50 years, so it’s possible many will struggle to take care of themselves physically, medically and financially.

Seventy percent of everyone 65 and older will need some type of long-term care at some point in their lives, the Department of Health and Human Services says. When health issues force seniors to require a higher level of care, they can quickly exhaust their retirement savings. The burden of caring for them either falls on loved ones or Medicaid.

A growing number of seniors are turning to life care communities, like those operated by Brookdale Senior Living, to preserve their own long-term well-being and to ease emotional and financial stresses on their families.

A life care community — also commonly referred to as continuing care community — charges an upfront entry payment and a monthly fee in exchange for long-term accommodations and health-related services. A contract formalizes the arrangement between the community and the residents, guaranteeing seniors receive the agreed-upon care even if their financial resources are eventually exhausted.

Here are some common questions about life care communities:

* Who is a candidate for a life care community?

Anyone older than 62 may be eligible to live in a life care community, if they meet financial and medical qualifications. Most continuing care retirement communities offer multiple types of accommodations — including independent living, assisted living, Alzheimer’s and dementia care, and rehabilitation and skilled nursing. This means you can enter the community at any stage, including when you are still independent. As your care needs increase, you can move between accommodation and care levels.

* What should I know about entry and monthly fees?

Continuing care communities charge an entry fee that is typically in the range of $ 150,000-$ 200,000. Many seniors choose to fund this fee through the sale of their homes when they need to downsize into a more manageable living situation. Fees can vary depending on the type of accommodations and level of care you need. Monthly service fees average $ 2,500-$ 3,500, depending on the type of contract. While the fee may vary slightly from year to year and depending on the level of care you need, your community may agree to cap increases; Brookdale voluntarily caps annual increases at the consumer price index plus 2 percent at most of its life care communities.

* How will entering a life care community affect my taxes and estate planning?

The IRS considers life care to be a pre-paid medical expense, so tax deductions are often available for portions of the upfront entry fee and monthly service fee — typically up to 40 percent of the fee. Because deductions can vary state to state, you should consult with your tax advisor to get a better idea of the tax benefits. Entering a life care community can also affect your estate planning. A life care contract takes care of the portion of your planning that would address funding your health care needs; the contract ensures your health care needs will be met even if you run out of money (through no fault of your own). You may also choose a refundable contract that returns a portion (up to 90 percent) of your entry fee to your designated beneficiary after you pass away.

* What are the health benefits of living in a life care community?

A life care community ensures your medical needs will be met throughout your life — without you having to worry about how you’ll pay for the care you need. The communities also offer mental health benefits. Live entertainment, special meals and events, daily opportunities to dine with others or participate in games and hobby groups ensure you’ll never lack stimulating activities or interaction with others. Life care also encourages seniors to remain independent for as long as possible, without restrictions on driving, traveling and shopping as long as you’re able.

“Longer lives and increasing health care costs mean it’s a harsh reality that many seniors will struggle to care for themselves later in life,” says Dr. Kevin O’Neil, a clinical professor of aging studies at the University of South Florida, and chief medical officer of Brookdale Senior Living. “The good news is life care communities can be a long-term solution, helping seniors maximize the value of their retirement savings, and ensuring they’ll have access to the care they need throughout their lives.”


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