Trends in Senior Living Communities

Financial and wealth planners are you discussing trends in senior living communities and housing that become relevant during retirement years for your clients? Are you aware of other related costs of care that you may not be included in a financial plan?

The youngest baby boomers, born in 1946, are approaching the age where decisions will be made to sell homes and move to a senior living community or choose other in-home care options. Perhaps a move to Jimmy Buffet’s retirement community, Latitude Margaritaville, is in the future for you or your clients?

Some baby boomers will choose to move to independent or assisted living communities between the age of 75 and 85. Boomers who are healthy may choose to delay a move for another 10 years or more. Those who planned with foresight may choose to remain in their homes with in-home care as long as possible, even until the end of life.

Some baby boomers, because of advancing health concerns, will be forced to leave their homes earlier than planned. These limited choice moves may be to a skilled nursing community. While beneficial care is provided in skilled nursing communities, this is often a care situation of last resort.

I remember my mother threatening us (children) with these words, “whatever you do, never ever put me in a nursing home.”Mom passed away over 20 years ago, at the young age of 69. We honored her request, no nursing home.

Awareness of Senior Living Communities and Options

• Are you aware of community options for adults in the the 55+ age group?
• Do you know the current costs for the various types of communities from independent living, to memory care, to skilled nursing care, including annual inflation projections?
• Are you aware of the preferences and concerns of older adults who move into these types of communities?
• What about cost projections for ancillary care services or care oversight?
• Have you discussed the purchase of long-term care insurance with clients?

The discussion should involve the details of the purchase and the “whys” and “benefits” of purchasing a policy. And while you initiate these conversations, do you have your own policy?

Are you aware of medical conditions that result in long-term care policy declines and conditions that result in higher premium costs? Are you able to explain the cost-benefit ratio of purchasing at a young age, like in the 30s or 40s versus waiting until age 60 or later? Do you know the steps involved in initiating a long-term care insurance claim?

What about options provided by a reverse mortgage to remain in a home as long as possible? Then there are the last resort benefits available through Medicaid and VA programs. What is your comfort level in discussing these programs?

If you are familiar with this information by way of reading as compared to actual experience, this article presents an opportunity to increase your knowledge. I also recommend collaborating with experts in the caregiving and aging specialties. Expertise in caregiving and aging specialties has widespread value beyond retirement planning for care costs. You are about to become a better resource for your clients.

Communities and the Progression of Care Needs

The last 10 years prior to retirement should be the highest earning years with the opportunity to save and invest. These years can be challenging if chronic health issues or injuries exist. Lost time at work may increase. Work hours may be reduced. The possibility of becoming disabled and not able to work at all increases during the years nearing retirement.

By the age of 50, many individuals are diagnosed with at least one chronic disease. Chronic diseases are problematic but not life-threatening diseases like heart disease, arthritis and osteoporosis, diabetes, COPD, asthma, and cancer. Persons with chronic diseases are the most frequent users of the U.S. healthcare system. Chronic disease results in the more frequent use of prescription medications, physician visits, hospitalizations, and specialist visits.

Health and well-being cannot be ignored when evaluating lifestyle options and planning for the costs of senior living communities or in-home care options to remain at home. A fluctuation in one area significantly impacts funds available to pay for care.

Disability Statistics

According to the Social Security Administration (1):

In 2016, disability benefits were paid to almost 10.2 million people as compared to 1.8 million in 1970. The average age of disabled persons was 54 with an almost equal split between men and women. The largest category of diagnoses was diseases of the musculoskeletal system and connective tissue. The average monthly benefit received was $1171.15. 

The monthly benefit of $1,171.15 is slightly below the 2018 single-person federal poverty level reported by Health and Human Services of $12,140 per year or $1011.67 per month. In 2018 the Medicaid income level for a single person was $16,543.

Do your clients who are employed or self-employed have short and long-term disability insurance in the event they are unable to work? While none of us ever expect to be disabled and need this type of insurance, we also never hope to have to use our automobile or homeowner’s insurance policies. Life circumstances are impossible to predict.

Growth in Older Adult 55+ Households

According to the Met Life Mature Market Institute and the American Housing Survey (2):

The population of persons age 55+ is projected to grow annually, and account for nearly 45% of all U.S. households by the year 2020. The primary reason for moving to a 55+ owner-occupied community continue to be family and personal reasons, and the desire to have a higher quality home. In multi-family communities, the family was the number one reason as well, but reducing costs came in second.

The consideration of health, financial savings and investments, and home ownership are strong considerations for persons age 55+ who desire to purchase a new residence, whether in a neighborhood or in one of the new 55+ communities.

If a home is purchased, can the individual predict with reasonable certainty the ability to live in this residence for the next 10-20 years and pay for all related costs including in-home care if needed? If not, purchasing a new residence may be a risky choice.

In my experience as a caregiving advocate, many of my aging clients had a desire to downsize from a large home to a smaller home. Ages at the time of consideration were across the board from the 50s to the 70s. The results were mixed. Some remained in the smaller home. Others within a short period of time moved to a retirement community due to care needs.

Rather than considering a continuing care retirement community, the more common choice of my clients was to purchase a home in a 55+ community or rent an apartment. Some of my clients were able to continue to live in the 55+ housing communities because of having financial resources to pay for daily in-home care at a cost of an additional $3-4,000 per month.

Other clients who purchased into the 55+ housing communities were forced to sell their homes and move into a care community. They did not have the additional financial resources to pay for in-home care.

Unexpected events, like changes in health or accidents that resulted in hip fractures, were the culprits that forced the move. These clients broke even or lost money on the sale of the home due to a short time frame of 1-2 years prior to having to move again.

Clients living in independent apartment communities had more flexibility. These individuals who had to move unexpectedly were less affected relative to losses or gains. The move to the retirement community did mean that they had to begin spending retirement savings to pay for needed care.

Consideration of a cross-country move was also a significant part of decision-making when thinking about needing care and persons to provide the care. Some of my clients did not want to move away from friends, established social support systems, and activities to start over again to be near adult children. Instead professional fiduciaries like me were appointed to act as medical and financial power of attorney, personal representatives, or trustees at the time of need.

Other clients moved to be near adult children. The results were mixed. Some adult children became devoted to spending time with parents and supporting care needs. The opposite also occurred. Parents had expectations of frequent contact and support only to be placed in a care community with rare visits by adult children.

Realistic discussions about residential moves after the age of 50 are important to identify a plan for the remaining half of life and potential costs. Health status and financial status are extremely important components of these discussions as well as realistic potential family support.

Many parents expect their adult children to provide care without asking children if they are willing and interested. This unrealistic expectation results in difficult family relationships. Other parents do not wish to be a burden and make independent plans.

Trends are moving toward aging adults of all relationships (married, single, partners) to appoint professional fiduciaries, even if adult children or other family members are available. Fiduciary appointments have the expectation to avoid family conflict.

Collaboration with attorneys in the areas of elder law, estate planning, or probate will benefit these planning discussions as well as the potential appointment of fiduciary responsibilities. Caregiving advocates should also be included in these conversations.

Continuing Care Retirement Communities

A continuing care retirement community (CCRC) is a senior living community option that encompasses all levels of care needs. Many CCRCs offer independent living, assisted living, memory care, and skilled nursing. The benefit is that the older adult moves into a single community and may move within care units but never has to leave the community. The staff has the opportunity to establish long-term relationships with residents which is beneficial to the quality of care.

The downside is that some CCRCs have significant “buy-in” options much like purchasing a home but with a reduced monthly fee. Others have annual agreements only, with pay-as-you-go fees that increase, on average, by 6% per year. There are also CCRCs that have the requirement of moving in when healthy, meaning into independent living. These communities do not allow entering into a higher level of care so this availability is reserved for current residents who may need to move between levels due to changes in care.

Costs range from $3500 for independent living to $10,000 a month for skilled nursing care. Communities have base rates with care levels or point systems. The care levels or point systems add care in increments of $300 to 500 per level based on the complexity of care needs. Residents requiring significant medication management or increased levels of physical care pay higher monthly rates. Individuals having long-term care insurance policies are generally able to use the policies at an assisted living level of care or higher.

CCRCs have amenities like visiting physicians or nurse practitioners, beauty salons, occasional transportation, housekeeping, medication management, meals, on-site physical therapy, activities, movie theaters, and exercise rooms.

Stand-Alone Communities

Stand-alone communities range from age bracketed, 55+ or 62+, senior housing options ranging from apartments with no services, to independent living with some services, to assisted living with varying levels of services. There are single locations that may have two care options combined. For example, independent living with services and assisted living with levels of care.

Many residents in stand-alone communities should be made aware that they will have to hire private paid in-home care services or possibly move to skilled nursing at the time care needs exceed services offered by the stand-alone community. Stand-alone communities may not have as many amenities as CCRC communities.

As with all communities a thorough review of the contract, which may vary from 20-60 pages, is critically important. An understanding of services provided, requirements to move to a higher level of care, and why an individual might be asked to move from a community is among important information.

Common Concerns About Retirement Communities

For my clients and other residents in care communities, food is the most common complaint. Having set menus with no alternate meal choices is the least favorite option. Communities are moving toward a set menu with alternate choices. Coffee, juice bars, and bistro-type areas where snacks are available 24 hours a day are also becoming more common.

Even more concerning is the requirement of having “table partners.” This means that there is a set dining schedule for example 4:30 p.m. and 6:00 p.m. Residents are seated with the same individuals for each meal.

This set time and set table partner requirement is beginning to change with communities offering options for alternate dinner times and the ability to sit at different tables. However, this option may ruffle the feathers of residents who like familiarity and the routine of having the same table partners.

Peer groups and peer pressure occur in retirement communities. It is as if residents have returned to grade school, high school, or college years. Gossip mills exist. Residents who are totally independent and able to come and go freely are less affected. For others, being limited by not driving, while transportation is offered by many care communities, limits friendships and socialization opportunities for other residents living within the community. Boredom equals gossip.

The concern of “living with old people” is a concern mentioned by my clients when touring care communities. The same is mentioned when attending activities at a senior center is suggested. I often hear, “I don’t want to be with old people”.

My experience has taught me that older adults are openly prejudiced against peers who require more assistance. For example, healthier older adults prefer not to live with peers using walkers or wheelchairs. Healthy older adults do not wish to be seated near individuals at meal times who may require hands-on feeding assistance.

This prejudice exists because the daily experience of living with the future becomes the future. Statistics confirm that residents in care communities gravitate to the least physically able in the group. For example, if all residents use walkers, and a single resident moves in who walks independently, within a relatively short period of time this resident will also use a walker. The same is relevant for cognitive and intellectual level declines.

The fear of seeing the future become the future is real. Consideration must be given to the current population living in a community to confirm that those living in the community are equal or better to the physical and cognitive abilities of the older adult considering a move. This then allows similar residents to age and decline physically and cognitively together.

For example, in communities where residents of similar status moved in at the same time, in 10 years a transition to a very different level of average ability occurs. As time passes, residents require more care. Over time, they become more physically and cognitively impaired. This term is referred to as “aging in place”. Aging in place can occur in a private home or in a senior care community.

As resident care needs increase, the opportunity is provided to remain within the same community provided the community has the transition options to higher care levels. For communities that do not have skilled nursing on-site, when resident abilities significantly decline beyond the staffing skills offered in assisted living communities, a move is imminent.

For a humorous look at aspects of retirement communities like meal times and activities watch Peyton Manning (3) in a humorous video as he describes his “retirement” from football and move to a retirement community. Peyton remains his famously competitive self among residents who are significantly older.

Gaps in Senior Care Community Healthcare Staffing Needs and Training

I would be remiss if I did not call attention to healthcare staffing needs and training as one of the main quality of living concerns and resident satisfaction issues affecting senior living communities today. Positions in care communities are typically lower paying. Many positions do not offer benefits. Few communities offer training or much-needed emotional support for caregivers. The stress of working in care communities results in high turnover if management support and training does not exist.

If family caregiving is difficult and challenging, healthcare staff in care communities are even more challenged. Imagine having the task of bathing 10 residents every day. Complaints about scheduling time, refusals to bathe, and healthcare staff being required to appropriately respond to residents with behaviors who bite, kick, scream, or pull hair. Successfully and calmly completing these activities requires a special person who has been well-trained.

What about the daily task of physically transferring clients and changing soiled clothing multiple times in a single day? The physical tasks to support residents are daunting and exhausting. Family caregivers who have helped aging parents have a similar experience.

Community healthcare staff who love their jobs and are dedicated to resident care exist. There are an equal number of healthcare staff who go through the motions until they find a better opportunity. These are the benefits and risks to which residents living in retirement communities are exposed. Residents unable to advocate or speak up for themselves, who are diagnosed with dementia or Alzheimer’s disease,  are at greater risk of care neglect.

Add to this the fact that many of these healthcare workers are double and triple-duty caregivers. These terms mean that female healthcare staff care for clients at work. After work, it is home to care for children and aging parents. This daily routine is both physically and emotionally exhausting. The outlook for the future is not likely to change relative to the availability of healthcare staff.

The emotional stress experienced by healthcare staff is extreme. Support and training in the healthcare work setting are lacking. The benefits of training are reduced turnover and fewer errors in care. Increases in resident and family satisfaction happen when healthcare workers are trained and feel more confident in their abilities.

• To become more informed about training and issues with healthcare workers and the healthcare system, click HERE to link to my professional healthcare video playlist.

Additional Care Costs

In my 20+ years as a caregiving advocate, I served as a professional fiduciary for my clients in the roles of guardian and medical power of attorney. I also served as a care manager. The quality of care offered by senior retirement communities varies with staffing turnover and management commitment to care.

Some communities are more willing to work with legal appointees to address concerns. Others deny concerns and defend poor staff care. Care for older adults for whom no one shows up to monitor care is often neglected in favor of other family members who show up and express concerns. There is truth in the statement that the squeaky wheel gets attention.

The same applies to visiting medical providers in senior care communities and to older adults leaving communities to visit medical providers in their own offices. Unless the individual or a family caregiver is versed in the questions to ask, poor care results. Physicians have told me that my older adult clients were problematic and disposable. This meant that my clients were not offered treatment prior to significant objections voiced by me as the legally responsible person.

There are times when additional efforts must be made to ensure care. I moved my clients to different senior care communities because of poor care by staff. In other situations, I retained paid caregivers to come into communities to provide additional care for clients who had the financial resources to pay for this level of service. Care conferences and ongoing staff meetings were held with community staff and additional providers to ensure that the care deserved by my clients was the care provided.

Only when one realizes that there are no perfect senior living community situations can one become a true advocate. Many family members are unable to negotiate this role or do not have the time to devote to this effort. Many older adults want the support of a professional to relieve family members of this time burden. This time gap opens the doors for retaining professional caregiving advocates and care managers.

• For information on how a local care manager supports client and family situations, click to watch my 22-minute webinar about the benefits of care management.

Hiring professional fiduciaries in the roles of guardian, medical and financial power of attorney, personal representative or trustee adds costs over and above senior care communities. Retaining a care manager is also beneficial and adds cost but saves worry. These care needs and the associated financial costs are discussions that should also be considered when financial planning for retirement and care needs.

Changing Population Needs Inspire Elaborate Senior Community Designs

As the baby boomers continue to age, the senior community is experiencing new market entrants catering to different needs. In 2017 singer Jimmy Buffett (4) announced the opening of Margaritaville Retirement Communities catering to the 55+ age group of Parrotheads, the affectionate term for Buffett followers. Florida and South Carolina are the initial markets for the communities called Latitude Margaritaville. (5)

New offerings in forward-thinking communities are catering to the special interests of individuals who have the desire to be pampered and who have the financial resources to pay. Imagine daily happy hour in a bar that looks like Cheers. A fitness center with equipment, weights, swimming pools, and personal trainers that rival independent fitness centers. Wireless Internet, technical access, and Ted Talks via video programming.

Pampering offerings that include full beauty salons, massage, reiki, and acupuncture on site. Healthy dining options. A personal concierge. And for those interested in social activities: 4 o’clock tea, formal dinner services requiring black tie dress, and outings to the symphony and other cultural events. The sky is the limit.

Retirement Communities for Clients with More Conservative Tastes

Senior care communities for those with more moderate tastes will always exist at costs that continue to increase by 6% on average per year. Individuals with lower income and retirement accounts who are more conservative have options other than elaborate settings.

Reverse mortgages for homes paid can buy years of in-home care. This choice delays a move to a more expensive care community. When the home equity is used costs transfer to savings. At this point, retirement investments and savings may pay for in-home care or a move to a retirement community may be the next step.

Personal care homes are affordable options that offer fewer amenities but generally good care. Depending on the state, these homes are more likely to accept Medicaid after a time frame of private payment. Advance planning in this situation is required as personal care homes may prefer 1-2 years of private payment. At the time retirement savings approach $100,000 it is time to make the decision about moving. Many CCRC and the larger stand-alone senior care communities do not accept Medicaid.

Personal care homes are located in private neighborhoods nestled among residential homes. They can be noticed by small signs on the outside and wheelchair ramps to front entrances. These homes were either remodeled ranch homes or were built for the specific purpose of being personal care homes. Continuing state regulations for personal care homes continue to be implemented to ensure the quality of care and safety.

Rates average between $4-5,000 a month for personal care homes and are usually all-inclusive. Personal care homes have annual rate increases less than the industry average of 6% and many who move into the homes are able to remain until the end of life.

Residents in these homes often have higher needs that match support provided in assisted living or memory care. There are fewer residents, usually 6-8. Activities are limited to in-home music, bingo, crafts, and occasional outings.

These homes are beneficial for persons diagnosed with Alzheimer’s disease and other chronic diagnoses that require a calm, routine environment providing a greater frequency of hands-on physical and personal care. During my 20+ years as a care advocate, I have found personal care homes, operated by registered nurses, to rival or equal the care provided in the larger retirement communities.

In Colorado, visiting physician groups cater to personal care homes with medical staff who visit weekly. The care goal is to manage medical conditions to avoid emergent transfers to hospitals for care. Many personal care homes have visiting beauticians and podiatrists. Medication management, meals, housekeeping, and personal care are provided by house staff many of whom are certified, nursing assistants.

VA Benefits and Medicaid

For clients who will likely outlive their financial resources, options exist for VA benefits and Medicaid. VA benefits are available for “Aid and Attendance” and other programs for veterans or spouses who had wartime service. Income restrictions do apply however are higher than the standards for Medicaid. VA service officers in VA offices who are able to explain the programs and qualifications. They also assist in completing applications at no charge.

There are financial planners and attorneys who offer Medicaid planning services to filter money and investments into accounts that cannot be considered by Medicaid. This type of planning must be completed in advance due to lookback periods and paying off penalties. At this time this type of planning is considered legal.

Adult children who feel entitled to receive their parent’s retirement savings respond favorably to this type of Medicaid planning. Some older adults refuse as they view this type of planning as cheating the government. This is a personal and ethical decision.

For low-income individuals who have exhausted their savings, the government program Medicaid is the payer source. Applications are best submitted months in advance due to the time frames required for approval. County offices or Medicaid suppliers are slow to process.

Medicaid offers home and community-based services coming into the home. Reimbursement is also provided to assisted living communities that accept Medicaid and skilled nursing communities with available Medicaid beds. Know that there can be wait lists for Medicaid available communities.

It has been my personal experience that Medicaid applications become “lost” in the system. Applications I personally delivered were left on the desk of an employee on leave for weeks until a helpful employee decided to complete a hard search. Other times the application pages become separated and have to be re-submitted. The effort required for approval of an application requires dedication, consistent follow-ups, and a great deal of patience.

The Complexities of Planning for Senior Living Communities

Choosing care when care is needed is complex. Options exist for in-home care, independent residences, and senior living communities. Within these choices is a multitude of other choices and options that are rarely discussed or considered before an immediate need.

Each consideration delivers another alternative to consider. Aging and caregiving are specialties not usually contacted until after a crisis has occurred. I received panicked calls from concerned family members at 4 p.m. on a Friday for a family member who was being released from the hospital within the hour. Other family members would call me the day before a discharge from skilled nursing in the hope I would work my 24-hour magic or pull a favor and find an assisted living community willing to accept a loved one.

Crises occur. A lack of planning is common. Individuals and caregiving family members lack an understanding of the healthcare system. Many times, individuals and family caregivers are simply too overwhelmed to hear or understand the information provided to them. This is the importance of collaboration between healthcare, legal, and financial planning.

Individuals, pre-planning for fiduciary needs who are aware of the costs of care and are concerned about who will provide care, are the wise who plan ahead. These individuals met with me years in advance of a need. I called them “clients in waiting”. Always mentioned were coordinating plans with financial planners and estate planning or elder law attorneys.

Caregiving advocates are experts at picking up the pieces and solving complex situations. Much like financial and wealth planners, elder law, estate planning, and probate attorneys with specialized knowledge, we have similar specialized knowledge.

Collaboration between financial and wealth planners, elder law, probate, and estate planning attorneys, and caregiving advocates is beneficial to individuals seeking to create comprehensive plans for the future. Communication after events have occurred and problems exist, is also beneficial to manage unexpected or problematic situations.

The healthcare system is imperfect. Unfortunate situations happen. Individuals and family caregivers benefit from expertise to navigate these situations. Specialized expertise is needed. Collaboration is needed. Collaborate and be the expert who guides your clients early in their planning to avoid unexpected situations in their retirement years.

Looking for more resources for caregiving families or yourself, check out Pamela’s complimentary online webinar program about caring for elderly loved ones.

Sources:

(1) Social Security Administration,“Annual Statistical Report on the Social Security Disability Insurance Program,” 2016. SSA Publication No. 13-11826. Released 10/2017.  Highlights p.1.

(2) Met Life Mature Market Institute. “Housing Trends Update for the 55+ Market: New Insights from the American Housing Survey,” January 2011, p. 2-3.

(3) Manning, Peyton. Moving to a Retirement Community. You Tube https://www.youtube.com/watch?v=nvoMmxzmXts

(4) Kreps, Daniel, “Jimmy Buffett to Open Margaritaville Retirement Communities,” Rolling Stone Magazine,” 3/5/2017. Accessed 10/15/2018 https://www.rollingstone.com/music/music-news/jimmy-buffett-to-open-margaritaville-retirement-communities-112302/

(5) Latitude Margaritaville Retirement Communities. Accessed 10/15/18 https://www.latitudemargaritaville.com/locations

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