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Financial Options for Seniors

Moving into a Senior Living Residence

NASHVILLE, Tenn., March 4 /PRNewswire/ -- Selling a home and moving into a senior living community may be one of the most important decisions an individual, couple and/or family will ever make. For most seniors, the time to tap into home equity and take advantage of special offerings tailored to their needs is now rather than later. However, during times of economic downturn, this decision is often unnecessarily delayed.

"About one fourth of seniors have remained in their homes for 30 years or longer," said Ron Aylor, senior vice president of sales for Brookdale Senior Living, the largest owner and operator of senior living communities. "More than one third of seniors have up to 75 percent of their net worth tied up in their home, and rely upon that equity for retirement housing and care needs. Therefore, through past appreciation and accumulated equity in their homes -- and investing wisely -- today's seniors can turn that equity into a lifestyle of comfort and security at a senior living community."

A graph, found here (http://www.brookdaleliving.com/publicfiles/New-Houses-Sales-Graph.pdf), also shows that those in their homes for more than 10 years have significant equity.

"Many seniors hope for a return to the sky-high prices of 2006 before they consider selling their home. However, there is a serious flaw in this logic for seniors," said Aylor.

If a home declines in value by 25 percent, it must then increase in value by 33.33 percent just to recover the decline. According to Aylor, if one assumes that home prices will decline an additional 5 percent in 2009, remain flat in 2010, and then grow at the decades-long, historic rate of 5 percent, it will take until 2018 for that to occur. Further, the real estate 'bubble' of 2001-2006 is not likely to recur, reports Aylor; so, waiting for a full price recovery is an unrealistic expectation for many seniors.

Supporting graphs illustrating this can be found here (http://www.brookdaleliving.com/publicfiles/Housing-Price-Recovery-2.pdf).

"Despite the price retraction from 2006 highs, seniors possess significant equity in their homes with most owning them debt-free," said Aylor. "With home ownership comes routine maintenance, expensive repairs, housekeeping and lawn chores and/or expenses, insurance payments, property tax and more. Eliminating these costs is significant. Freeing the equity in one's home for use to fund senior living housing offers tremendous advantages to seniors. There are many options available to assist today's seniors in making this move."

One viable option for some seniors is to take the equity in their home and consider a move to a Continuing Care Retirement Community (CCRC) that offers Life Care protection. With this choice, seniors reap many benefits from the community. For example, in a Brookdale Life Care community, housing and various levels of service and healthcare are available for residents' changing needs as they age. Life Care protection means that once accepted in a community offering Life Care, that community will take care of a resident for life, even if they lose all their assets through no fault of their own.

"We encourage those considering the move to be proactive, and enjoy the benefits of a retirement community while they are in good health," said Aylor. "Declining health could negate qualifying for Life Care as an option when one is finally ready to move."

When moving into a Life Care community most seniors will use the money from the sale of their home to satisfy the entry fee. To alleviate the concern of selling in today's economy, Brookdale Senior Living offers a Home Purchase Plan (http://www.brookdaleliving.com/financial-options.aspx), where the company will purchase a home if it has not sold in a specified period of time.

Another option for seniors is to retain the equity from their home sale and utilize investment earnings to help fund living in a rental community that does not have the entry fee. The same benefits of retirement living can be enjoyed, but without the healthcare protection.

Seniors may also be concerned about assets and have need for additional assistance. Resources and benefits exist to help, and a solution is available for virtually any situation. Some recommendations include:

    --  Partnering with a real estate company that offers a variety of financial
        packages to facilitate a home sale. These may include: short-term,
        unsecured loans; bridge loans secured by home equity; and assistance in
        staging the home, packing, and/or moving.
    --  Considering a senior living community that offers special programs.
        These could include delaying some fees or partial accrual of fees until
        the home sells.
    --  Tapping into the expertise of a financial planner to develop a plan.
    --  Seeking banks that have programs designed specifically for seniors.
    --  Determining if special programs apply. For example, Veterans and spouses
        of Veterans may be eligible for their rent to be subsidized by the VA
        Aid and Attendance program.
    --  Short-term assistance from family members.

In addition, senior living communities, such as those owned by Brookdale, often work with other vendors. Brookdale teams up with Elderlife Financial Services, which assists families and seniors interested in financing their move to a senior living community. Elderlife's services are designed specifically to help seniors move into a Brookdale Senior Living community, or to supplement their move while waiting for the sale of a home or other benefits to kick-in. Funding is provided by M&I Bank FSB for loans obtained through the Elderlife Financial Services process.

"In the face of falling home and stock values, rising inflation, and depleted savings, many families are seeking access to liquidity and flexible payment options," said Elias Papasavvas, chief executive officer of Elderlife Financial Services. "With the current economic conditions predicted to last into 2009 and beyond, alternative funding options for senior housing and care are increasingly sought by families. Families are also seeking flexibility and access to senior living without the need to sell their homes. We make these financial solutions available to help."

For more information, visit http://www.brookdaleliving.com/financial-options.aspx

SOURCE Brookdale Senior Living