Expert Insight into Senior Care
Brought to you by CRBT Wealth Management | July 2019
As the Corridor Business Journal recently stated, a “silver tsunami” is upon us. Across the United States, the Census Bureau estimates that there will be more people over the age of 65 than under the age of 18 by 2035.
From a state-wide perspective, the number of Iowans age 75 and up are set to grow by 7% by 2024. Locally, the growth is even greater, with residents age 75 and up in Cedar Rapids and Iowa City on pace to grow by 10% and 20%, respectively, during that same period.
As the chart below clearly shows, the U.S. is in the process of a major demographic (r)evolution, which will bring much in terms of economic, policy, and housing implications.
Senior Care Options and the Continuum of Care
Interestingly, despite the continued and growing demand for senior living options, the Corridor is currently experiencing an oversupply of senior living units. For those living in the area, this will come as little surprise, as evidenced by the seemingly endless supply of new senior living developments dotting the Cedar Rapids landscape.
Ironically, while the supply of senior living units has never been greater, consumer knowledge and understanding – at least from what we have heard anecdotally – surrounding their options has never been smaller.
Additionally, much of the language surrounding care options is at best murky, and at worst, completely foreign. For example, a major concept in senior care is the idea of the “continuum of care”. Put simply, this refers to the increasing intensity of healthcare services that a person may need as they age.
While this is a fairly straightforward idea, confusion arises when it’s necessary to choose a senior living option in light of where you currently are on the continuum of care. The whole process can be very frustrating and overwhelming.
To remedy this lack of knowledge, we have included an interactive chart below that addresses the different types of senior living options, as well as their relative cost and location on the continuum of care.
Questions to Ask
In addition to the general lack of knowledge many consumers have regarding their options, many consumers admit to not knowing what questions to ask.
Ultimately, it’s possible to do all the research – the articles, books, and blog posts – but still feel paralyzed with indecision. In order to move forward you have to ask yourself two questions:
- What does home mean to me? We know this is more philosophical than many people like to get, but it truly is a very important question to answer. Not answering it, or procrastinating, can create a large stumbling block that keeps you from moving forward on this journey. Not only is the idea of senior care difficult to discuss or think about because you’re addressing your own mortality, but also because it requires you to redefine what home has meant to you for your entire life.
- What’s my plan A? Take a serious look at your lifestyle, goals, and dreams and ask the tough “what ifs?” What if I have serious health issue sooner rather than later? What if I need to be in higher skilled care for longer than expected? Will I have the resources to cover everything? What will happen if there is a crisis? Asking yourself those questions is hard, but absolutely essential in order to arrive at the best path going forward.
Once you have answered these questions and have determined a baseline of what is important to you, the next step is to shop around and find your new home.
This is the part of the journey that can be overwhelming because of the sheer number of choices. It can be easy to experience paralysis by analysis and not know where to begin. As a starting point, here are some important questions to ask as you interview senior care communities:
Is your community a for-profit or non-profit entity?
While neither is inherently good or bad, this question will allow you to have a better understanding of the structure and potential limitations of the community.
What happens as my health needs change?
The answer to this question will quickly allow you to see where this care option falls on the continuum of care.
What are my contract options?
Most senior living communities are centered on either fee-for-service or life care. Simply put, life care will have the most expensive monthly fees, but will generally not increase as your health needs change. A fee-for-service, on the other hand, will be relatively less expensive initially but will increase as your health needs change.
Additionally, many communities will also have either equity or rental contracts available. Equity contracts would allow you to actually purchase real estate or a co-op within the community. Again, there are higher up-front costs associated with equity, but many individuals like this option as it allows them to maintain equity in an asset whose proceeds can go to their beneficiaries upon their passing.
What happens if, through no fault of my own, I’m unable to continue paying?
The risk of outliving your assets is real, especially as medical advancements are continuing to increase life expectancy. While some senior care communities would never ask residents to leave due to inability to pay, others may be less flexible.
Do you have a wait-list? If so, how long do individuals typically stay on it?
For obvious reasons the better senior care communities often have wait-lists. Some independent or assisted living facilities have wait-lists of several years. This is yet another reason to start doing your due diligence now so that you can have a plan in place before you need one.
Finally, while the experts we spoke to all have different experiences and preferences they all came back to several common themes, including:
- The earlier you start the process the better. Too many have waited too long to make such an important decision.
- Define your Plan A. What are your non-negotiables?
- Ask the hard questions. Both to yourself and to the communities.
- Shop around. Everyone has different preferences and needs. Remember, this is an important decision and should not be rushed.
While we certainly understand the limited scope of this guide, we hope it proved helpful as you either begin or continue your path towards choosing the right type of senior care. We understand how overwhelming this all can be and we are here to help in any way we can. Ultimately, if you take just one thing away from this guide, please remember that the time to do something is now, on your terms, so you can live on your terms later.
Resources National Investment Center for Seniors Housing & Care (NIC) www.nic.org
Sources Carlon, Katharine. “Despite Shifting Demographics, Senior Housing Faces a Glut.” Corridor Business Journal, 18 Mar. 2019, pp. 3, 8, 9.
“Explanation of CCRC Contracts.” MyLifeSite, www.mylifesite.net/resources/explanation-of-ccrc-contracts/.
“Types of Senior Living and Levels of Senior Care.” SeniorLiving.org, www.seniorliving.org/care/cost/.
“What Is a ‘Continuum of Care’?” MyLifeSite, 31 Oct. 2017, www.mylifesite.net/blog/post/what-is-a-continuum-of-care/.