After forking over $840,000 to live in a New York continuing care retirement community following the sale of their home three years ago, Bob Curtis, 87, and his wife Sandy face losing a huge chunk of those savings, according to Bloomberg.
“I can’t replace what I have here,” Bob told the publication in an article posted Dec. 3. The couple expected to spend the rest of their lives receiving care at the facility, Bloomberg reports, but it went bankrupt in 2023. Now, along with nearly 200 other residents, they could see a large portion of the money they invested to live there go up in smoke.
Continuing care retirement communities (CCRCs) are a type of retirement community that provides for seniors through the entirety of their later years. The idea behind CCRCs is that they offer different levels of help as the resident’s needs change. They may include independent living apartments, assisted living facilities and skilled nursing homes all in one place.
CCRCs are attractive to retirees who want to prepare for an uncertain future — but they can have steep entrance fees. Bob’s contract with his facility entitled him or his heirs to recover up to 90% of that initial investment in the case of a move or death, per Bloomberg, but the contracts can be voided in bankruptcy court. The residents may be forced out and stand to lose up to $130 million unless a new owner is found who is willing to take on those refund obligations.
Here are some things to consider about CCRCs for those considering this living arrangement.
Sandy suffers from dementia, and moving to a new home could cost between $12,000 and $19,000 a month for care alone, according to Bloomberg, while an apartment for Bob at a senior community would cost another $8,000 a month. The loss of their investment would present a steep financial challenge if they were to relocate. And they’re not alone.
At least 16 CCRCs nationwide have filed for bankruptcy since 2020, the publication reports, with blame being placed on pandemic restrictions, labor shortages, higher wages and a rise in supply costs. Bloomberg also cited a survey of one type of CCRC — those that charge a monthly fee and offer housing, residential services and unlimited health care all on-site — found half of facilities operated in the red in 2023.
