Boomers: Retire Here, With Money-Back Guarantee

Retired couple
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Retired couple

You will enjoy your golden years here—or get your money back. That's the guarantee that residents of retirement communities like Vi at Highlands Ranchoutside Denver are banking on.

Baby Boomersand early retirees are buying units at retirement communities for flexibility in a tough real estate market and greater access to care as they get older.

This money-back guarantee doesn't come cheaply. At Vi, the entry fee alone can range from $175,000 to $1 million, but residents can get that money back when they leave (even if home values drop). And that policy was a big incentive for D. Ann Schneider and her husband, John Canavan.

Schneider, 67, was looking for more space in a new home to work on her pottery, but was hesitant to buy another house in a shaky real estate market. She and her spouse opted to purchase a unit at Vi, a full-service, "life-care" retirement community.

"It's psychological insurance," said Canavan, who is 75. A major attraction for residents to communities, like Vi, is the fact that your buy-in fee funds assisted-living or nursing care, should you need it. Monthly fees at Vi range from $2,900 to $5,500 dollars and cover not only activities, but also assisted-living needs.

"It sort of becomes the long-term care policy," saidSuzanne Hall, a financial advisor based in Baltimore, who specializes in working with seniors.

Today, there are about 1,900 continuing-care retirement communitiesin the United States, some of which are rentals, with more than half a million residents. Retirees can pay a much smaller upfront fee at many retirement communities and still guarantee themselves access to care with trained staff or the ability to transfer to a nursing-home bed. At other facilities, retirees can opt to pay for services they need along the way.

In choosing a new place to live, Hall cautions clients to have a lawyer and a financial planner review contracts and the costs of additional services, if not included. Such services at some facilities, she said, can be at least $2,000 per month.