January 19, 2016

Continuing Care Retirement Communities


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Continuing Care Retirement Communities or CCRCs are becoming more and more common. CCRCs are retirement communities that offer different levels of service and health care at the same location or campus. Most CCRCs have apartments, cottages, or small houses, which allow healthier residents to experience a neighborhood feel while still enjoying access to the amenities (restaurants, gyms, libraries, clubs, etc.) of the larger campus. CCRCs also usually have smaller apartments or rooms for residents who need more assistance in addition to skilled nursing facilities and rehabilitation centers. The idea is to not have to move to multiple residences towards the end of one’s life, and to not have to be separated from a healthier or sicker spouse.

The growing popularity of CCRCs is due to a number of reasons. For one, residents want to keep their independence as long as possible and CCRCs allow them the flexibility to do so. CCRCs also allow many sick residents to stay with, or at least in the same facility as, their healthier spouse. Additionally, many residents either do not want to be a burden on their spouse or family, or simply do not have spouses or families that are able to handle the burden of care necessary to support them. With people living longer and longer, I would expect this trend to continue. I’ve already seen it as I have helped a growing number of clients transition themselves or their parents to CCRCs. It’s a big decision; emotionally and financially, and one that should not be taken lightly. In that spirit, I’d like to offer a few financial tips I’ve learned along the way.

  1. Know what you can do. As you might imagine, there are varying qualities of CCRCs with varying costs. It’s important to look at what your new living expenses would be and whether that is a feasible “burn rate” given your amount of assets and life expectancy. Many people have to sell their primary residence to make a move to a CCRC possible.
  2. Figure out your real estate options. If you need to sell your primary residence when moving into a CCRC, talk with the CCRC before making any decisions. In some cases they have people or relationships that can help you clean out and even sell a home at discounted rates. I’m talking estate sale experts, realtors, and mortgage brokers. Some CCRCs offer financing on a short term loan between the time you sell your primary residence and move in, but sometimes “outside” financing on a loan to bridge you between the sale of your old home and the purchase of your new CCRC home may be necessary.
  3. Consider refundable versus nonrefundable options. Some CCRCs charge you more up front, but promise to give your heirs a portion of your down payment back after you pass away or if you pass away within a certain period of time. Depending on the specific offer, your financial capabilities, and your life expectancy, there can be a strategic decision to be made here.
  4. Consult with a CPA. At certain CCRCs, a portion of your initial down payment can qualify as a medical deduction for income tax purposes. Ask any CCRC you are considering if this is the case, and then if so, talk with your CPA. A really large medical deduction might cause you to have a really low or negative income tax year in the year you move into a CCRC, so it may make sense to pull some income forward or recognize some extra income in such a year if possible. Perhaps the CCRC will let you pay the down payment over two tax years so you can spread out the deduction? A medical deduction for moving into a really nice CCRC can near six figures, so the tax planning on this isn’t something to just do yourself or with your generic tax software!
  5. Get on a waiting list sooner rather than later. There are more people interested in CCRCs than there are spots available. If you know there is a particular facility you are interested in or you have friends going into, inquire if there is a waiting list. Usually you can get on a waiting list for several hundred to a few thousand dollars that may even be refundable if you change your mind. You may not be able to get into the CCRC you want to when you need it if you don’t go ahead and get on the list beforehand!

As always, if I can be of assistance to you or someone in your family considering a move into a CCRC, please let me know. You know where to find me.

-Tom

January 05, 2016

Unplugging from Work

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Happy New Year! I hope you and your loved ones had a wonderful Christmas and a special holiday season. I also hope you were able to unplug from work. Were you?

A CareerBuilder survey taken in July found some disturbing news. Almost one in five people acknowledged that they had no ability to unplug from the office. Almost one in five people said they had a tough time enjoying other activities because they were thinking about work. Almost one in four people admit to checking work emails during activities with family and friends. Almost one in four people said work is the last thing they think about before they go to bed. Almost two in five people said work is the first thing they think about when they awake. Now I’ll admit that after my alarm goes off Monday through Friday, I often strategize my work to-do list in the shower, but other than that, what is wrong with these people?

As the old adage goes, no one on their deathbed has ever said “I wish I had spent more time at the office.” I don’t know about you, but I work to live. I do not live to work. I enjoy and get fulfillment out of my job, but if I could be at the beach with my family or at the game with my friends, I would!

There have always been "workaholics," but thanks to good old technology, now it’s even harder to separate work and life. An article on Time's Money.com states that the Center for Creative Leadership found smartphone users spend an average of five hours on work emails each weekend, and a Glassdoor poll found more than 60% of people work during a vacation.

Look, I’m not advocating to slack off or not work hard, but I am advocating to work when you work and play when you play. I am advocating for building a moat between work and life. I am advocating for looking at things in terms of life/work balance and not work/life balance.

I once had a supervisor articulate that time off did not mean less work; it simply meant rearranging when you did the work. I’ve found that to be true, and a good way to look at vacation. Get all of your stuff done that has to be done before you go, work ahead as much as you can so you won’t be drowning when you come back, and then tell your boss and co-workers you’re gone and actually fall off the grid!

Let’s face it, though, despite your best efforts to leave everything tied up in a bow, something is probably going to hit the fan while you’re out. Who is going to address the issue? You if you don’t leave other people’s names, phone numbers, and emails who can pinch-hit for you on your auto response emails or your voicemail. And just say when you’re going to be back versus some line about periodically checking emails. Cut the cord!

There may also be times where you have to protect yourself if you are truly going to disconnect. If you get a text from a co-worker at an ungodly hour, don’t respond immediately unless you really have to. If someone emails you on the weekend and you happen to be working, don’t reply immediately unless it’s absolutely necessary. This can be a bit trickier, but if a client or customer starts trying to do business after hours, you may need to consider waiting to respond until normal business hours to really establish a boundary. If you always jump when the open sign is off, you are setting expectations that don’t allow you to ever unplug. Remember, if you give a mouse a cookie (or a co-worker or client an unnecessary response while on vacation), he or she is probably going to want a glass of milk!

Finally, if you are a smartphone user, may I make a recommendation? Turn off the “Badge App Icon” for your email under “Settings” and then “Notifications.” This will get rid of that evil little box that tells you how many unread emails you have. It’s liberating – trust me!

Occasionally I work at night, once in a blue moon I work some during a weekend, and ever so rarely I send a work text or a work email while on vacation, but for the most part, I unplug. There is a point where productivity and quality will suffer if you work enough hours. If you’re rested, you’ve had a little fun, your spouse is happy, you’ve spent some time with your family, and you have a few friends, you’ll actually be a better employee. I bet you’ll be a happier person, too!

-Tom