Retirement Living News

December 2009

HEADLINES  (Click on headline to read story)

• New Study Examines Financial and Psychological Effects 
  of Moving for Elderly
• Hospitality Expertise Seen As Key Factor in 
  Success of Retirement Communities
• AAHSA Demonstration House Highlights Technology to 
  Assist Seniors at Home
• New Census Data Shows New York and New Jersey Counties 
  Rank Highest in Property Taxes
• Survey Finds Significant Increases in Costs for 
  Assisted Living and Nursing Care
• New Book: Inside the Huddle -- Don't Plan Your Future Without It

Archive of Past Issues                          New Retirement Communities

NEWS STORIES

New Study Examines Financial and Psychological Effects 
of Moving for Elderly 

Moving is an important decision for any homeowner, requiring one to weigh the familiar comforts of a home and neighborhood against the uncertain potential of a new location. A move decision may be even more challenging for an older person. On the one hand, older people often have a decades-long attachment to their current residence. On the other hand, they may face new opportunities (ample leisure time) or challenges (the loss of a spouse) that affect their desire or ability to stay where they are. 

A new study released by the Center for Retirement Research at Boston College entitled, "Older Americans On The Go: Financial and Psychological Effects of Moving" examines the differences between two types of retirees: the Planners and the Reactors. The study focuses on financial and psychological outcomes between the two types based upon various changes that occur during their retirement. Factors affecting change include newly widowed, nursing homes, newly divorced and health shocks. 

The study finds that in terms of financial outcomes, movers who experience negative shocks are more likely to reduce their housing equity, which indicates that households may use their equity as a precautionary asset. Regarding psychological outcomes, as expected, households with shocks tend to have more negative changes in psychological well-being than those without shocks. 

This report introduces the use of a sample of households in the analysis. It analyzes what characteristics influence a decision to move. One section of the report looks at the impact of moving on home equity, while another considers the impact on psychological well-being.
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Hospitality Expertise Seen As Key Factor in Success 
of Retirement Communities

The key to success in operating senior living communities is creating a relationship with residents. That was the conclusion of John Rijos, co-president and COO of Brookdale Senior Living, and Dan Madsen, president and CEO of Leisure Care who were participants in the first Senior Living Roundtable held at the Cornell School of Hotel Administration in October. 

The roundtable was the first the university has hosted dealing with senior communities and was developed by Cornell's Center for Hospitality Research. Rijos pointed out that success in senior living means creating a culture of more than service. Madsen agreed, explaining that this culture is about creating relationships. 

While senior living communities require considerable medical expertise, the panelists said that hospitality-focused employees are best suited to serve most of residents' needs. Although the properties are not hotels, John Cobb, president and CEO of Senior Lifestyle Corporation, explained that they look and operate like hotel properties, and residents expect hotel-like services. 

The key differences between hotels and senior living communities include sales procedures and real estate ownership. Unlike hotels, it often takes 18 months or more for a person or couple to decide to move into a senior living property. The decision is made only after a tour of the community, often with other family members. This means that all of the property's features must be on display. Also unlike hotels, senior living companies usually own and operate their facilities.

Participants at the Senior Living Roundtable expect U.S. demographics to work in their favor. Rijos foresees more properties in urban settings, which will allow residents to take advantage of cities' cultural features. Even so, proximity to family is the overriding criterion for choice of a residence.
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AAHSA Demonstration House Highlights Technology to 
Assist Seniors at Home

Last month at the American Association of Homes and Services for the Aging (AAHSA) annual meeting and exposition, the organization had on display a 2,600 square foot model of AAHSA's Idea House which displayed some of the latest features in universal design and technologies that are currently available for senior living developers and operators. The design and technologies shown focused on improving an elderly person's quality of life while reducing health care costs, encouraging healthy behavior change, improving safety and providing caregivers with support. 

"From sensor systems to high-tech medication dispensers adjustable height cabinets that lower so that people in wheelchairs can access them, technology and design have converged to make aging easier - and safer - in today's modern world," AAHSA CEO Larry Minnix said. "We are pleased to be able to bring to life a vision that can be within reach of every elder in America." 

More than 90 percent of the products on display at the AAHSA Idea House are on the market today. Product highlights include: 

• A medication dispenser that automatically organizes, reminds, dispenses and monitors an individual's medication use. The technology enables pharmacies to be notified when refills are needed. 
• Electronic distribution of medical records to doctors, family members and caregivers on an ongoing basis. The distribution enables timely responses to the data, thereby improving an individual's health outcomes and reducing health care costs over time. 
• Automatic personal emergency response systems, including fall detection that monitor a person's events and notify emergency medical services and caregivers immediately when needed. 
• A security system that replaces the traditional peephole with an LCD screen to make it easier for people in wheelchairs or other needs to see who's at their door. 
• Hybrid Assistive Limb (HAL), a wearable robotic suit that is designed to multiply a person's strength by reading bio-electric signals a person generates. The suit uses those signals to guide the movement of robotic limbs strapped to a person's arms and legs. With HAL's help, many stroke patients may be able to walk and nurses have extra strength to move individuals who need assistance. 
• Height-adjustable kitchen and bath appliances designed to meet different users' needs.
• A passive sleep monitoring system that monitors a person's sleep quality, breathing and heart rate as he/she lays on the mattress and enables caregivers to detect sleep-related markers of disease, like urinary tract infections and depression, earlier. 

"It's important that consumers and providers of aging services know what kind of products are out there, which is why we built this home. Whether you're looking to adapt an existing home, evaluating retirement communities or updating assisted living facilities with the latest technology, the Idea House will show you the kinds of things that will make life easier for seniors today and in the future," said Eric Krull, an associate at THW Design (www.THW.com) and the lead architect on the project. 

"Numerous studies prove that seniors want to use technology, and are willing to pay for it, if it will help them remain in their homes as long as they can," said Majd Alwan, PhD, director of the Center for Aging Services Technologies (CAST). "The AAHSA Idea House gives the general public and aging-services providers a chance to see the range of technology that is available and talk with the companies that are leading the way to meet the needs of this growing market segment." 

CAST is leading the charge to expedite the development, evaluation and adoption of emerging technologies that will transform the aging experience. It is looking at new technology solutions that offer great promise to improve quality of care while reducing healthcare costs. To view a video of their vision, click here 
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New Census Data Shows New York and New Jersey Counties 
Rank Highest in Property Taxes

U.S. Census Bureau data released in late October and analyzed by the Tax Foundation show that over a three-year period (2006, 2007 and 2008), homeowners in New York and New Jersey counties paid the most in property taxes, while those in Louisiana parishes paid the least. In seven New Jersey counties and three New York counties, the median property tax over 2006-2008 is more than 7 percent of median household income, compared to the national median of 2.85%. The data covers counties whose population exceeds 20,000.

Top 10 Counties 

The top 10 counties in median real estate taxes paid over 2006-2008 are, from 1 to 10, Westchester County, NY ($8,404); Hunterdon County, NJ ($8,347); Nassau County, NY ($8,306); Bergen County, NJ ($7,997); Rockland County, NY ($7,798); Essex County, NJ ($7,676); Somerset County, NJ ($7,676); Morris County, NY ($7,310); Passaic County, NJ ($7,095); and Union County, NJ ($7,058). The national median is $1,854. 

The top 10 counties in median real estate taxes as a percentage of home value over 2006-2008 are (all from the state of New York), from 1 to 10, Orleans County (3.04%), Niagara County (2.95%); Allegany County (2.92%); Monroe County 2.89%); Wayne County (2.85%); Montgomery County (2.75%); Genesee County (2.73%); Cortland County (2.71%); Chautauqua County (2.66%); and Seneca County (2.65%). The national median is nearly 1% (0.96%). 

The top 10 counties in median real estate taxes as a percentage of homeowner income over 2006-2008 are, from 1 to 10, Passaic County, NJ (8.34%); Essex County, NJ (8.12%); Nassau County, NY (8.00%); Bergen County, NJ (7.89%); Union County, NJ (7.80%); Rockland County, NY (7.61%); Westchester County, NY (7.55%); Hunterdon County, NJ (7.50%); Suffolk County, NY (7.24%); and Hudson County, NJ (7.20%). The national median is 2.85%. 

Bottom 10 Counties 

The bottom 10 counties in median real estate taxes paid over 2006-2008 are (all from Louisiana), from highest to lowest amount, De Soto Parish ($129); Evangeline Parish ($127); Jefferson Davis Parish ($127); Webster Parish ($125); Sabine Parish ($124); Richland Parish ($122); Avoyelles Parish ($120); Vernon Parish ($120); Allen Parish ($119); and Franklin Parish ($117). 

The bottom 10 counties in median real estate taxes as a percentage of home value over 2006-2008 are (also all from Louisiana), from highest to lowest percentage, Livingston Parish (0.15%); Terrebonne Parish (0.14%); Avoyelles Parish (0.14%); West Baton Rouge Parish (0.14%); Assumption Parish (0.14%); St. James Parish (0.14%); Lafourche Parish (0.14%); Tangipahoa Parish (0.12%); St. John the Baptist Parish (0.11%); and St. Bernard Parish (0.11%). 

The bottom 10 counties in median real estate taxes as a percentage of homeowner income over 2006-2008 are (also all from Louisiana), from highest to lowest percentage, Lafourche Parish (0.28%); St. John the Baptist Parish (0.28%); De Soto Parish (0.28%); Jefferson Davis Parish (0.28%); Webster Parish (0.27%); Beauregard Parish (0.27%); Evangeline Parish (0.26%); Allen Parish (0.26%); Vermilion Parish (0.26%); and Vernon Parish (0.25%). 

To view this data in table format, click here. 
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Survey Finds Significant Increases in Costs for 
Assisted Living and Nursing Home Care

Price rollbacks throughout the U.S. economy during the past year did not apply to long-term care service providers, according to the 2009 MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services, and Home Care Costs. Private room nursing home rates rose 3.3% to $219 per day or $79,935 per year, while assisted living also rose 3.3% on average to $3,131 per month. Home health care aides now cost an average of $21 per hour, a 5% increase; adult day services run $67 per day, a 4.7% increase. 

For nursing homes, the highest costs for a private room were reported in Alaska ($584/ day) while the lowest were in Louisiana ($132/day). Assisted Living costs were highest in Wilmington, Del., ($5,219/month) and lowest in North Dakota ($2,041/month). The highest Home Health Care Aide rates were $30 per hour in the Rochester, Minn., area, while the lowest were reported in the Shreveport, La., area at $13 per hour. Adult Day Services were highest in Vermont at $150 per day and lowest in Montgomery, Ala., at $27 per day. 

The study, which groups Assisted Living communities into three categories-- "basic" (five or fewer services), "standard" (six to nine services) and "inclusive" (10 or more services)-- notes differences from 2008 in the number of communities in each category. More are classified in the middle "standard" range and fewer in the "basic" category. Communities in the "standard" category include more services in their base rates, but, on average, also have higher base rates. 

The study also found that those who enter an Assisted Living community with Alzheimer's disease, or those who develop Alzheimer's later, can expect to pay more for that care, with an average monthly cost of $4,435. 

"These across-the-board increases may be surprising to many given the economy over the past year," said Sandra Timmermann, Ed.D, director of the MetLife Mature Market Institute. "But, while the Consumer Price Index (CPI) decreased overall during the past year, costs for medical care are 3.3% higher, which parallels our findings on long-term care. The change in pricing methods at some assisted living communities may be another factor, a warning to consumers to carefully compare prices at all long-term care service facilities by considering both the base price and the add-ins for additional services." 

Additional Long-Term Care Facts 
About three-quarters (73%) of the home health care agencies surveyed provide Alzheimer's training to their employees, and almost all (98%) of the agencies surveyed do not charge an additional fee for patients with Alzheimer's. About one-quarter (27%) of the home health care agencies surveyed have a 24-hour or live-in rate. The average capacity at adult day service centers is 44. The average client-to-staff ratio is 6:1 with a maximum of 20:1. 

Methodology 
This survey of nursing homes, assisted living communities, home care agencies, and adult day services in all 50 states and the District of Columbia, including national figures and data from 87 individual markets across the country, was conducted by telephone between July and October 2009 for the MetLife Mature Market Institute by LifePlans, Inc. For nursing homes, private-pay rates for long-term (custodial) nursing care were obtained for private and semi-private rooms throughout the U.S. At assisted living communities, costs were obtained for room and board (at least two meals per day, housekeeping and personal care) in one-bedroom apartments or private rooms with private baths. Home care rates were based on hourly rates for home health aides at licensed agencies and agency-provided homemaker/companion services. Adult day service costs reflect daily rates at licensed facilities for the majority, though licensing requirements vary by state. To read the full report, click here. 
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New Book: Inside the Huddle -- Don't Plan Your Future Without It

For those planning their financial future and need to make informed investment decisions, Inside the Huddle examines how financial advisors may not always lead you down the best path. The book is written by Antoine Orr, a Maryland-based registered investment advisor with 15 years of experience. He discusses why it is very difficult for middle class America to accumulate enough money for retirement. "Excessive fees and the exclusion of tax-free investments will make this task virtually impossible," he writes. 

For individuals already in or near retirement, their financial independence goals may fall short due to unscrupulous advisor behavior and ill-advised retirement planning strategies. Orr is especially critical of financial advisors who push their clients into commissionable variable annuity contracts. The commissions are very high - 6 to 8 percent. If one invests $250,000 in a variable annuity, the advisor makes $20,000 in first year compensation. Of that amount, 30 percent goes to the firm that employs the advisor. On average, annual fees from variable annuities can run as high as 3 to 4 percent. 

The author urges people to become more educated about investing. "No longer will you be able to 'trust' your advisor. In fact, your should 'trust' that your advisor will more often than not have an inherent conflict of interest, as long as he or she is receiving a fee, commission or salary for services rendered," he notes. 

Readers will find part of this book a great resource tool to use in working with their financial services professional. The 282-page paperback book, which lists for $24.95, can be ordered from Amazon. 
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