Understanding the Financial Qualifiers
Individuals and couples who decide to move to a Continuing Care Retirement Community do so for the attractive maintenance-free homes, for the inviting common spaces that host engaging activities, and for the promise of care if ever needed in the future. This promise allows residents to sleep easier with the knowledge that a plan is in place should they exhaust their resources while paying for their care.
Buildings, programs, and care come at a cost for a retirement community. Eventually, all costs are considered when communities establish the financial qualifiers that determine whether a future resident can “afford” a particular style of cottage or apartment. Each community uses its own calculation to come up with financial qualifiers. The calculation always involves a household’s total assets and monthly income. In some communities, the potential residents’ age is also considered.
Let’s imagine for a moment that retirees George and Sally visit two beautiful communities this week. In both of the communities, Village X and Village Y, they look at a well-appointed 1,150 sq. ft. two-bedroom apartment. The Entrance Fee and the Monthly Service Fee are remarkably similar in both communities. However, because each community has its own qualifying formula, it is entirely possible that George and Sally will be approved to join the wait list for the apartment in Village X and declined in Village Y.
In order to avoid disappointment, older adults who start researching retirement communities should keep some basics in mind. Before approving a deposit from a future resident, the marketing team needs a clear understanding of their finances. For each apartment or cottage, the Retirement Counselor needs to see “on paper” a minimum level of assets and monthly income. If the community has a long wait list, today’s fees will probably go up before the future resident makes it to the top of the list. Go ahead and ask the Retirement Counselor whether age is considered when assessing finances (Cross Keys Village doesn’t at this time), as this would set the bar higher for younger applicants.
Be careful how you list any annuities you may own. Before it is annuitized, an annuity is an asset. Afterwards, it becomes an income source that cannot be counted as an asset any longer. Some communities allow applicants to count a Long-Term Care insurance policy, up to a point, as part of their assets (Cross Keys Village does). Furthermore, applicants should be ready to answer some delicate financial “what if” questions, about survivor spousal benefits for instance. If life has rewarded you with generous resources, however, a letter from your accountant or financial advisor may be all you need to provide.
Being open about finances with your Retirement Counselor will enable them to give you better guidance. As you complete your research, you will find that financial qualifiers at Cross Keys Village are lower than in most of our peer communities, especially for our smaller cottages and apartments.