Resources & Blog

Jeff House
Posted: Tuesday, February 07, 2012

The Cow in the Convertible

In community presentations and focus groups people often ask Retirement Dynamics, "What's the best deal: a Lifecare or fee for service retirement community?" or "Is it better to pay a smaller entrance fee or get a refund?" These questions are often another way saying "I'm not ready yet." Here are some ideas to help people get themselves ready to make a decision they will be happy with.

Retirement communities are like any other business: they cost what they cost. There are no bargains: best will always cost more than worst, but that doesn't mean all communities are created equal for you. The good news is that there are 2,000 retirement communities from which to choose, and often you have more than one important choice within the same community.

A tenet of good marketing is to listen carefully to what the customer wants and needs, but it should be a tenet of being a good customer, too. If a friend asked "should I pay $30,000 for a pick-up truck or $20,000 for a convertible?" your first question would likely be "what do you want to do with it?" The same approach works for picking a retirement community.

If you begin by picking the "best deal" you are likely to end up carrying cows in your convertible. Yes, you could make that work, but you wouldn't be happy with the results.

Before you think about the "deal," think about what would be a successful retirement for you. First, decide which characteristics matter most to you. In the list below, the easiest questions are listed first. Do this homework before you start the field work of visiting communities and reading brochures.

Where do you want to live? Choosing a retirement community is about more than location, but geography is the easiest way to simplify your search. If you want to live near your adult kids, are you sure they will stay put? Do you want to stay in the neighborhood you've lived in for 75 years? Would you be unhappy if you couldn't see the ocean every day or take in a new show every week?

Do you smoke, drink or have a dog? Some communities have very definite rules on those personal preferences.

What is home to you? Make a list of "must have" and "nice to haves." How many bedrooms and bathrooms would be right? Can you see yourself in an apartment?

Who do you want to live with? Are you happiest with members of your own faith, alumni of the same college or members of the same branch of the military? On a personal level, how does your idea of family fit the retirement community's idea of family? Do you make a million acquaintances or treasure a handful of close friends?

How do you spend your life? What activities interest you most? What inspires you? What is it that you wouldn't be you if you couldn't do? What dreams do you still want to live out?

Do you care who gets your money? Is it important to you to leave money to your grandchildren or a bequest to the SPCA? Do you want to "die the day the money runs out?" Ask your financial advisor if a refundable entrance fee is the best way to accomplish your goals.

What can you afford? Do you have long term care insurance? Will you need to sell your home before you can move? What are your household income and expenses now?

How do you want to pay for it? At some communities you can have exactly the same services under different payment plans. Even if the total dollars were the same, do you care whether you pay an upfront fee to get a lower monthly fee or avoid paying an upfront fee by paying a higher monthly fee? Would you insist on owning your residence or absolutely refuse?

As you think about these questions, talk with family, friends or professional advisors, but remember your first assignment is to clarify what your successful retirement would be, not which community to choose. Once you're clear on your goals, then you can start comparison shopping and kicking the tires on that convertible.