Retirement Homes for Less | Business Ideas

Most people wouldn?t dream of buying a house or a car without negotiating the price. Yet many families don?t realize they can bargain for what can be an even bigger-ticket item: a retirement residence.

James Steinberg

With assistance from her wealth-management firm, Shirley Nerenberg, a 90-year-old widow in suburban Philadelphia, wound up saving 35% of what it otherwise would have cost her upfront to move into a continuing-care facility.

Her daughter, Lisa Nerenberg, says the firm negotiated an entrance-fee discount, two months of free rent, a monthly rent discount of $500 for six months and a $2,000 moving allowance.

Irvin Schorsch III, president of the firm that helped her, Pennsylvania Capital Management in Jenkintown, Pa., also advised the family that they could drop the mother?s long-term-care insurance policy, saving several thousand dollars a year, since the community they chose includes long-term-care services in its fee.

Dickering can pay off. ?Active adult? developments often charge steep monthly fees for amenities, and continuing-care retirement communities, or CCRCs, generally require a hefty deposit, along with monthly fees for care ranging from independent living to round-the-clock nursing.

The average entrance fee for a CCRC unit is $259,000, according to the National Investment Center for the Seniors Housing and Care Industry, a research and data group in Annapolis, Md.

But the real-estate downturn, which made it tougher for older adults to unload their houses, in turn wiped out waiting lists at many popular retirement communities, giving retirees who are ready to move in more leverage, experts say.

Such communities need to stay full to fund their general operations, build reserves and help finance refunds. The community where Mrs. Nerenberg plans to move, for example, refunds 90% of the entry deposit after the resident dies. And monthly fees paid by residents in independent-living units generally help support the higher costs of those who have moved to assisted-living or skilled-nursing arrangements.

Mr. Schorsch?s clients often provide two to three places they are considering, and he puts together spreadsheets breaking down the costs and benefits at each one. Recently, he says, he negotiated a golf-cart-for-life deal for a retiree moving to a large CCRC on hundreds of acres.

?If it breaks, the community has to replace it, and they have to maintain it,? Mr. Schorsch says. Another development installed a dishwasher and a ?bigger, fancier stove? for a client who loves to cook. Still, few families with means seem to realize that haggling is allowed, he has found.

Though the trend is in its early stages, other financial planners?especially those who serve a number of elderly clients?are starting to help clients evaluate local retirement-living options and their costs.

Bob Adams, a financial adviser in Winter Haven, Fla., recently helped a 74-year-old widow negotiate a 20% discount on the $100,000 ?refundable endowment? she paid to move into a CCRC in Orlando. He also helped her figure out that, ?apples to apples,? the cost was $700 a month less than she would have paid for a smaller unit without a full kitchen at another community.

?I got to hang her designer drapes in the new place,? he says, ?and that made her day.?

Sometimes planners band together with other professionals who work with the elderly so they can coordinate in-home services to avoid a more expensive move the client may not be ready to make.

Annalee Leonard, president of Mainstay Financial Group in Pensacola, Fla., recently pulled together a team of caregivers to provide rehabilitation, cooking, cleaning and transportation services for a client who had taken a fall in her home.

Another reason financial advisers are getting involved: to help protect clients? assets.

In the economic downturn, a number of communities sought bankruptcy protection. Others cut staff, reduced service or postponed opening assisted-living or skilled-nursing units.

To get a better sense of a community?s finances, two industry groups offer free online resources: CARF International?s Consumer Guide to Understanding Financial Performance and Reporting in CCRCs and LeadingAge?s Today?s Continuing Care Retirement Community.

You also should get a copy of the facility?s audited financial statements. Look for the facility?s number of days with cash on hand along with its cash-to-debt ratio, and ask the facility how it compares with competitors.

In addition, ask about any bond financing and whether the facility is meeting its terms, and find out whether it is part of a larger group so you can get a sense of whether its operator is financially stronger or has struggling locations.

The last thing you want, after all, is a retirement community that retires?abruptly?on you.

?Email: familyvalue@wsj.com

A version of this article appeared May 12, 2012, on page B8 in the U.S. edition of The Wall Street Journal, with the headline: Retirement Homes for Less.

live free or die hard carlos pena amanda bynes arrested f 18 jet crash in virginia beach john tortorella nicki minaj beez in the trap video