Untouched by the mortgage crisis
Seniors find financial advantage at retirement communitiesBy Mark Abromaitis
Many news reports surrounding the economy are grim. The real estate market is struggling, retirement funds are disappearing overnight, and skyrocketing expenses grab the headlines these days. But it’s not all doom and gloom for some of the retired, or those nearly so. Many seniors have succeeded in protecting their finances from uncertain times when they move to a retirement community.
“I don’t think many people realize the many financial advantages of moving to a retirement community,” says Bob Kramer, president of the National Investment Center for Senior Housing. “On top of all the amenities, convenience, and quality of life, there is a big financial benefit. The most trusted communities offer fixed monthly costs, 100% refundable entrance deposits, and are a good value for the money in any economic climate.”
The main drawing point for retirement communities has long been the quality of life and breadth of activities and health care options on campus. But now some communities offer financial stability and economic certainty to the list of amenities.
John and Dorothy Engelbrecht of Glen Mills, Pa., who wanted to move to a retirement community for the convenience and lifestyle, say they also experienced a financial advantage when they moved to Maris Grove, a senior campus in their hometown.
“The financial advantage of living here is that you write one check a month,” says Dorothy Engelbrecht, a retired geriatric nurse. “You don’t have [property] taxes. You don’t have utility bills, cable TV bills, water, and so forth. It’s just one check for the same amount each month, and there are never any surprises. That makes it easy to plan, financially speaking.”
Her husband agrees. “You get a lot for your dollar,” says the former engineer for Sun Oil. “The homes are beautiful, but that one check a month also covers so many other services. You have things like the security, the snow removal, grass cutting, leaves—any of the landscaping that’s done on-site. You also have meals at any of the restaurants. It is a very good value.”
Kramer explains, “I think when you compare your total cost of living—of what you really pay on a day-to day basis, including all those hidden things you spend money on—retirement communities are some of the best deals around.”
A smart investment
Erickson Retirement Communities, the owner and operator of the community that the Engelbrechts chose, has been in the business for 26 years. The company remains one of the most trusted in the industry and welcomed more than 200 new residents to its communities in the first quarter of 2009. And its forecast for the second quarter is higher still.
Tom Neubauer, Erickson’s executive vice president of sales, says that while the big incentives available today, like helping customers sell their current house, are appealing, much of Erickson’s success comes from the company’s long-standing policy of a 100% refundable entrance deposit, a rarity in the retirement community industry.
“We are seeing an increase in sales with the economy struggling,” Neubauer says. “I think many people are attracted to the financial security, knowing that their expenses don’t change on a monthly basis, but more and more people are choosing us for our refundable entrance deposit.”
Keeping your net worth
Joan Petrak, a longtime Delaware resident who moved recently to an Erickson community, says, “I looked around, but the 100% refundable deposit was the thing that really got to me.” “Real estate used to grow people’s net worth, but now that people are seeing a loss in [home] value, and with an unstable financial market, the established communities that offer 100% refundable entrance deposits are a safe and sound investment,” Kramer says. “You or your heirs can really have confidence that your investment will be returned to you.”
“I certainly wanted to be able to leave my children some money,” Petrak adds. “That was a big selling point. I felt like it was the best plan out there.”
For more information about the benefits of living at an Erickson community, call 1-800-917-8559.
Easy questions for tough times
If you’re considering a retirement community to help protect your finances, ask the following questions:
How much is the monthly fee? What does it include?
Is it more or less than your current household budget for those expenses?
Are you getting value for your money?
Do the monthly costs fluctuate?
Does the community offer a 100% refundable entrance deposit?
What is the company’s history and trackrecord? Does it put its promises in writing?
Does this company offer moving services or other incentives?