Beyond Long-Term Care – Wall Street Journal – 02/16/13

The Wall Street Journal

Weekend Investor – Family Value – February 16, 2013

Expecting the Unexpected When It Comes to Retirement Planning

By Kelly Greene

As long-term-care-insurance costs climb, families are turning to continuing-care retirement communities as an alternative.

Long-term-care insurance generally pays for home care, assisted living or skilled nursing when a policyholder suffers from dementia or needs help with at least two “activities of daily living,” such as bathing or dressing.

Some families are choosing CCRCs. They offer a range of care depending on medical need, from independent living that appeals to some healthy older adults seeking social activities, transportation or meals to 24-hour skilled-nursing care.

Be warned: CCRCs don’t come cheap. The average entrance fee for a CCRC unit, typically an apartment or a villa, is $280,000, according to the National Investment Center for the Seniors Housing and Care Industry, a research and data group in Annapolis, Md., in addition to monthly fees.

Comments February 16, 2013

When evaluating CCRCs consider the following points:

1. If the quality of services offered by the CCRC deteriorates can I leave the facility without penalty?

2. If I choose to move (to follow my family, for example) can I leave the facility without penalty?

3. If I leave the CCRC and move back to a traditional home will the CCRC still provide me care?

4. In the event my CCRC fails or files for bankruptcy, is my entrance fee guaranteed by a state reserve fund?

In their July 21, 2010 Continuing Care Retirement Communities: Risks to Seniors Summary of Committee Investigation, the U.S. Senate Special Committee on Aging states, “The CCRC model is particularly vulnerable during economic downturns, as stagnant real estate markets drive down occupancy levels in independent living units, which serve as CCRCs’ primary source of profit. Financial difficulties for CCRC providers could place a consumer’s investment at risk and raise their monthly CCRC expenditures.” In addition, according to the American Bankruptcy Institute Journal, “the CCRC industry is particularly vulnerable to insolvency, and several CCRCs have failed, primarily as a result of poor financial planning.”

When evaluating Long Term Care Insurance, consider the following points:

1. If the quality of services offered in your home, assisted living facility or nursing facility deteriorate you can change providers without penalty.  You pick the service providers, not the insurance company.

2. You can move from your home to an assisted living facility or a nursing facility in any order as many times as is needed.  Policies can be used in all 50 states, regardless of where you purchased the policy.

3. In the event your long term care insurance company fails or files for bankruptcy, your policy is guaranteed by a state reserve fund.  Like banks that are required to contribute towards FDIC insurance to protect depositors, insurance companies are required to contribute towards state reserve funds to protect policyholders.

Let us research the market and design a long term care solution to meet your needs and budget at:

Aaron Skloff, AIF, CFA, MBA
CEO – Skloff Financial Group

Aaron Skloff, Accredited Investment Fiduciary (AIF), Chartered Financial Analyst (CFA) charter holder, Master of Business Administration (MBA), is the Chief Executive Officer of Skloff Financial Group, a NJ based Registered Investment Advisory firm. The firm specializes in financial planning and investment management services for high net worth individuals and benefits for small to middle sized companies. He can be contacted at or 908-464-3060.


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