Retirement Living News

November, 2007

HEADLINES  (Click on headline to read story)

• Levitt and Sons Builder Facing Financial Problems
• Talent Gap Widening as Global Workforce Ages
• Baby Boomers Say Being Near Family is 
  Key Factor When Planning Next Move
• Study Finds Increasing Number of Seniors Living in 
  Age-Qualified Housing
• New Guide Offers Help for Those Considering 
  a Continuing Care Retirement Community
• Social Security Benefits to Rise 2.3 Percent

Archive of Past Issues                          New Retirement Communities

NEWS STORIES

Levitt and Sons Builder Facing Financial Problems 

In a move that may signal the end for a historic builder, Fort Lauderdale-based Levitt and Sons has ordered workers to halt construction on all of its projects. The company currently is building in Florida, Georgia, South Carolina, and Tennessee.

On October 11, the builder's parent corporation, Levitt Corp., announced it would not lend the subsidiary any more money. The homebuilder owes $2.6 million in interest payments to five lenders. 

"Levitt and Sons, like many other home builders, is navigating a challenging home building market," Levitt Corp. spokesman Michael Freitag said in a prepared statement. "We are working around-the-clock to address those challenges and resolve issues associated with our communities and the homebuilding environment in general. We are in active discussions with our lenders to obtain additional funding." 

The Levitt customer information line offered a similar communication. According to the recorded message, a call center will be established and staffed next week to provide customers with answers to any questions. In the interim, the message warned that customers "may encounter delays with respect to a warranty request." The message also stated that the company plans to "have more clarity on the situation" in the coming weeks. 

Levitt has issued stop-work orders to all of its builders and subcontractors in Georgia who are constructing Seasons at Laurel Canyon and Seasons on Lake Lanier. It has informally notified officials in Peachtree City, Ga., that it is abandoning plans for a 650-unit Seasons community there. 

The company reportedly is pulling out of the Memphis, Tenn., market and has already closed its Nashville office. 

Levitt and Sons is best known for Levittown, a community developed for returning World War II soldiers and their families. For a list of Levitt's active adult communities, click here. 
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Talent Gap Widening as Global Workforce Ages

Employers in the G7 countries must end age discrimination in the workplace if countries and employers are to be best positioned to thrive in the global economy tomorrow, according to a new AARP study, International Profit from Experience.

The study, conducted by the global consulting firm Towers Perrin, found that as the number of workers reaching traditional retirement years increase, the marketplace is experiencing a decline in the number of skilled younger workers available to fill in the ranks of those retiring. Even as companies and governments implement policies to address this talent gap, the older worker faces an unwelcoming environment. 

"Older workers are a vibrant and contributing force to the success of the global marketplace," said Bill Novelli, chief executive officer of AARP. "Employers in the United States, and throughout the G7 nations, must actively work to retain the talent of older employees if they want to maintain a competitive edge." 

The study finds that age discrimination is the single largest barrier for those 50+ who want to continue working past their anticipated retirement age. At least 60% of employees 50+ in each G7 country view age discrimination as the primary barrier to securing new jobs, as opposed to only 38% of employees that view their employers as welcoming of older workers. 

"While the survey clearly identifies the talent gaps emerging within G7 countries, the responses by employers do not sufficiently address this challenge," added Line Vreven, Director of AARP International. "Those nations working to actively retain older workers, and are providing incentives rather than deterrents to their continued employment, will reap economic gain in the long-run." 

Among the key findings, the survey demonstrates that: 

• Older workers in the G7 countries want to continue to work on average an additional 5 years, which would have an immediate effect of bolstering the declining global workforce. 
• Surges of immigration and productivity that might offset the anticipated decline in skilled workers are unlikely to occur. 
• While labor markets vary widely in each country, the growing competition for talent will, in every G7 country, drive up labor costs. 
• Allowing employees to continue working past their traditional retirement age will not only allow older workers to remain in their careers and stay active, but will have a positive impact on an employer's bottom line. 

The findings of the study were released at the AARP International Profit from Experience Conference in late September. The conference convened international opinion leaders for discussions on issues related to the aging workforce. It was sponsored by AARP in partnership with the European Commission, the Business Council for the United Nations and Nikkei,. 

To read the executive summary of the report, click here.  

Editors Note: Many seniors and retires are seeking full or part-time employment. We have just introduced a new section of our site called Jobs For Seniors.  If you or someone you know is looking for employment, you will find this section very helpful.
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Baby Boomers Say Being Near Family is Key Factor 
When Planning Next Move 

A recent nationwide telephone survey of more than 1,000 men and women age 50+ found that three out of four said that it was important to be near family when considering their next move. Further, when considering buying a new home, 43 percent would purchase a home to be closer to work or family - up 10 percent from last year's survey results. For those considering an active adult community, family and friends should be nearby according to 70 percent of those surveyed.

The survey was sponsored by ERA Real Estate as part of its annual home ownership survey of adults age 50+ nationwide and was conducted during between March and August 2007 by Opinion Research Corp. This is the fourth year ERA Real Estate has surveyed the 50+ demographic. 

Respondents were clear in their visions for where they want to live - and single family homes won out over active adult communities. Of the one in five thinking about moving in the next five years, 65 percent would most consider a single family home, which supports a recent report by the Joint Center for Housing Studies of Harvard University indicating few baby boomers will be looking to downsize. In fact, about one-quarter (24 percent) of survey respondents said the reason they would buy a new home would be to upsize compared with 15 percent last year. Of those who own single family homes, only 11 percent would consider purchasing a condo, townhouse or apartment. 

Active adult communities, however, are becoming more attractive. Last year only 2 percent were considering such a home compared with 6 percent this year. Further, men are three times more likely to consider a move to an active adult community as women -- perhaps because of the proximity to golf courses.

Although 55 percent of 50+ respondents say they currently have their dream home, there is room for improvement for those who don't. A designer kitchen or outdoor deck/entertainment area are the two most desired luxury enhancements respondents' dream homes would feature (76 and 75 percent, respectively). Other dream extras would include pristine landscape (71 percent), indoor sauna or hot tub (53 percent) or a home theater (46 percent). Not as dreamy is an Olympic-sized swimming pool (32 percent) and only 13 percent would desire to have a home on a golf course. 

"With more than 77 million baby boomers approaching retirement, it is critical that we provide valuable real estate information that is going to help them successfully prepare for retirement, while at the same time, capture their thoughts on the current real estate market," said Brenda W. Casserly, president and chief executive officer for ERA Franchise Systems LLC.
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Study Finds Increasing Number of Seniors 
Living in Age-Qualified Housing

The National Investment Center for the Seniors Housing & Care Industry (NIC) has released the 2007 edition of its National Housing Survey of Adults Age 55+, which reports on the opinions, attitudes, perceptions and behaviors of adults age 55 and older relating to seniors housing. The new edition compares results from an earlier survey NIC conducted in 1998 (with adults age 60+), providing an interesting decade-long comparison of changes in older adults' awareness and acceptance of age-qualified housing and their propensity to move to it. New this year are responses from a separate sampling of 222 independent living residents. In total, about 1,600 households were surveyed. 

Survey results show that the number of seniors who have moved to age-qualified housing has increased significantly since 1998. Twelve percent of age 60+ households in 2007 indicated that they lived in housing "planned specifically for people at least 55 years of age" compared to 7 percent of respondents in 1998. In this study, age-qualified housing refers to active adult communities, independent living, assisted living, continuing care retirement communities (CCRCs), 55+ apartments and rent-subsidized housing. 

In particular, households 75+ years of age appeared to be moving from their primary homes at a higher rate than previously seen. The average "tenure of current residence" among this age group was 24 years, down from 27 years in 1998. Nineteen percent of the 75+ households stated they lived in an age-qualified community in 2007. 

In the same period, the proportion of age 60+ households who preferred age-qualified housing to an all-age community or who would consider moving to either type of community more than doubled. Thirty-seven percent of households in the 2007 study preferred or were willing to consider age-qualified housing, up from 18 percent in 1998. Nine percent of age 60+ households said they had decided to move to an age-qualified property in the future, which is more than double (4 percent) those that indicated in 1998. 

Awareness has increased significantly within the decade for independent living communities (56 percent to 70 percent), assisted living communities (59 percent to 75 percent) and continuing care retirement communities (64 percent to 76 percent). On the other hand, knowledge of active adult communities remained essentially the same (64 percent to 62 percent). 

In addition, the proportion of age 60+ households who found active adult communities (56 percent) and CCRCs (57 percent) as "very desirable" or "desirable" places to live has remained the same since 1998, while the appeal of independent living (from 65 percent to 58 percent) and assisted living (from 59 percent to 52 percent) has decreased slightly during this time period. 

However, the survey showed that a significant opportunity exists for increasing the utilization rate of independent living among 75+ households. Although 13 percent of those surveyed indicated that independent living was "very desirable" and 42% "desirable as a place for them to live," only 5 percent currently live in independent living. 

"As a whole, these are positive findings for the seniors housing and care industry, as they suggest that the demand for age-qualified housing is strong and will continue to be so for the near future," said Robert G. Kramer, president of NIC. "On the downside, the desirability of age-qualified housing as a future living option has remained unchanged or, in some instances, even decreased slightly. 

NIC is a nonprofit organization that provides information about business strategy and capital formation for the senior living industry. The study was conducted by the ProMatura Group LLC, an Oxford, Miss.-based research and consulting firm who partnered with NIC to conduct the research and analyze the data.
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New Guide Offers Help for Those Considering 
a Continuing Care Retirement Community

For seniors who are thinking about moving to a continuing care retirement community (CCRC) a new guide is available to help you understand the serious lifestyle and financial ramifications and risks. It is titled Consumer Guide to Understanding Financial Performance and Reporting in Continuing Care Retirement Communities and was published CARF-CCAC, the nation's leading accreditor for CCRCs. The guide can be downloaded for free in PDF format from CARF-CCAC's Web site at http://www.carf.org/pdf/ccrc.pdf. 

In easy-to-follow language, the 24-page guide covers key financial indicators that consumers should watch for and describes various fee structures and contract types. It also includes a list of questions consumers should ask about financial performance, security and ownership. 

Moving to a CCRC may require a long-term contract and an entrance fee, which can range from $20,000 to more than $400,000, depending on the community and type of agreement, plus $200 to $2,500 in monthly fees. In return, a CCRC provides for its residents' housing and healthcare needs, ranging from independent living to assisted living to skilled nursing care, on one campus. Meals, transportation, housekeeping, recreation, social outings and other amenities might also be included. 

CARF was founded in 1966 as the Commission on Accreditation of Rehabilitation Facilities (CARF International) and is an independent, nonprofit accreditor of human service providers in the areas of aging services, behavioral health, child and youth services, DMEPOS, employment and community services and medical rehabilitation. The CARF family of organizations currently accredits more than 5,000 providers at more than 18,000 locations in the United States, Canada, Western Europe and South America. Close to six million persons of all ages are served annually by CARF-accredited providers. 

The Continuing Care Accreditation Commission (CCAC), based in Washington, D.C., was founded in 1985 as the nation's only accrediting body of continuing care retirement communities and aging services networks. CARF acquired CCAC in 2003. 

Many CCRCs today are accredited by the Continuing Care Accreditation Commission and the accreditation seal is usually found on the community's Web site. Although accreditation alone is not a guarantee of financial health, the accreditation process requires CCRCs to follow a rigorous set of standards based on industry trends and undergo a survey to determine conformance to those standards. The standards address the organization's business practices and financial performance in addition to other matters of importance to CCRC residents and their families. A CCRC accredited by CARF-CCAC has developed processes for financial planning and management and regularly reviews its financial performance. The standards also require the organization to evaluate its fee structure, profitability, cash management and investment strategies. CARF-CCAC reviews the annual financial audit reports and evaluates margin/profitability ratios, liquidity ratios and capital structure ratios for all accredited CCRCs. 

A list of CCRCs accredited by CARF-CCAC can be downloaded from http://www.carf.org/aging by choosing the 'Search for a Provider' option.
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Social Security Benefits to Rise 2.3 Percent

The nation's roughly 54 million elderly and disabled Social Security recipients will get a 2.3 percent cost of living increase in payments in 2008. This is expected to raise the average monthly payment for the typical beneficiary by $24. The 2008 increase is down from the 3.3 percent bump recipients received in 2007. Nearly one-third of the nation's retirees depend on Social Security benefits for 90 percent or more of their income. 

Starting in January 2008, the average monthly Social Security payment will rise from $1,055 to $1,079 a month for individuals and from $1,722 to $1,761 for couples. This increase will apply to both the elderly and disabled Social Security recipients, and individuals who receive both disability and retirement Social Security will see increases in both types of benefits. 

The Social Security cost of living adjustment also raises the maximum amount of earnings subject to Social Security taxation to $102,000. 

Benefit-reduction thresholds for those who retire early also will rise. The Normal Retirement Age (NRA) is age 65 and 8 months for those born in 1941 and 65 and 10 months for those born in 1942. Although there is no limit on outside earnings beginning the month an individual attains full retirement, those who choose to begin receiving Social Security benefits before their NRA may have their benefits reduced, depending on how much other income they earn. 

Early beneficiaries who will reach their NRA after 2008 may now earn $13,560 a year before Social Security payments are reduced by $1 for every $2 earned above the limit. Those early beneficiaries who will attain their NRA in 2008 will have their benefits reduced $1 for every $3 earned if their income exceeds $36,120 in the months prior to the month they reach their NRA. 

For 2008, the monthly federal Supplemental Security Income (SSI) payment standard for an individual will be $637, and $956 for a couple. For a complete list of the 2008 Social Security changes, go to: http://ssa.gov/pressoffice/factsheets/colafacts2008.htm
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