Sand Hill's Chief Investment Officer, Brenda Vingiello, CFA, joins Jenny Harrington on “Halftime Report” to go over their most recent portfolio moves. Brenda's commentary begins
Home Ownership: To Everything There is a Season
Published Date : November 7, 2014
Home ownership has long been a cornerstone of the American dream. Owning a home says you’ve “made it.” More than that, a home is a place to nest, raise your children and make memories. Understandably, these factors then make it difficult to think about moving to a retirement community and the dream to “age in place” takes hold for some. For others, a move to a retirement community offers a simpler life and freedom from endless home maintenance and unfinished projects. Perhaps most importantly, some retirement communities can provide the peace of mind that you will have much needed living assistance and long-term medical care if and when you need it.
Popular in this area are The Forum* and The Vi*. Both of these are known as a Continuing Care Retirement Community (CCRC) because they guarantee lifelong residence and provide a continuum of care: independent living, assisted living and skilled nursing all on the same grounds. CCRCs typically have strict age, financial and health requirements that applicants must meet before entry. Living in a CCRC, you will pay a monthly fee in addition to an entry fee, which may or may not include the purchase price of your particular unit. Prices can range from $550k to a few million depending on size and location. As expected, couples entering a CCRC pay a higher monthly fee and entrance fee than an individual, as these help cover the cost of care for the second person. And don’t forget about inflation when preparing your future budget as monthly fees can increase at roughly 5% each year.
When researching a CCRC to determine if its right for you, it is important to understand the particulars around the transition from one level of care to the next and what happens when you pass away. For some communities, the monthly fee is tied directly to your level of care. For others, there is a flat monthly fee for all levels of care. It is also important to research and understand the percentage of entry fees that are returnable to you or to your estate at death as it can vary greatly depending on the community and your specific contract. Additionally, be sure to check with your tax advisor to determine if any of your entrance fees or monthly fees are tax deductible as medical expenses — some are.
Finally, you may have heard that there is an extensive waiting list for highly sought after properties — and that is correct. If you think a move to a retirement community is on your horizon, start planning when you are healthy and at least three years before you anticipate making the move. Not only do you want to get your name on the waiting list, but you may need to start preparing your home for sale and going through your cherished possessions. A bridge loan may also be necessary to facilitate the purchase before your home is sold.
Today’s retirement communities are very different from the ones you may remember visiting as a kid. They can be vibrant centers of activity in addition to providing the security of living assistance and long-term healthcare when you need it. If you would like to explore this option further, Sand Hill’s Wealth Managers are happy to help you with reviewing your choices and exploring in detail the long term financial impact of your decision.
* Sand Hill Global Advisors neither endorses nor recommends The Forum or The Vi
Articles and Commentary
Information provided in written articles are for informational purposes only and should not be considered investment advice. There is a risk of loss from investments in securities, including the risk of loss of principal. The information contained herein reflects Sand Hill Global Advisors' (“SHGA”) views as of the date of publication. Such views are subject to change at any time without notice due to changes in market or economic conditions and may not necessarily come to pass. SHGA does not provide tax or legal advice. To the extent that any material herein concerns tax or legal matters, such information is not intended to be solely relied upon nor used for the purpose of making tax and/or legal decisions without first seeking independent advice from a tax and/or legal professional. SHGA has obtained the information provided herein from various third party sources believed to be reliable but such information is not guaranteed. Certain links in this site connect to other websites maintained by third parties over whom SHGA has no control. SHGA makes no representations as to the accuracy or any other aspect of information contained in other Web Sites. Any forward looking statements or forecasts are based on assumptions and actual results are expected to vary from any such statements or forecasts. No reliance should be placed on any such statements or forecasts when making any investment decision. SHGA is not responsible for the consequences of any decisions or actions taken as a result of information provided in this presentation and does not warrant or guarantee the accuracy or completeness of this information. No part of this material may be (i) copied, photocopied, or duplicated in any form, by any means, or (ii) redistributed without the prior written consent of SHGA.
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All video presentations discuss certain investment products and/or securities and are being provided for informational purposes only, and should not be considered, and is not, investment, financial planning, tax or legal advice; nor is it a recommendation to buy or sell any securities. Investing in securities involves varying degrees of risk, and there can be no assurance that any specific investment will be profitable or suitable for a particular client’s financial situation or risk tolerance. Past performance is not a guarantee of future returns. Individual performance results will vary. The opinions expressed in the video reflect Sand Hill Global Advisor’s (“SHGA”) or Brenda Vingiello’s (as applicable) views as of the date of the video. Such views are subject to change at any point without notice. Any comments, opinions, or recommendations made by any host or other guest not affiliated with SHGA in this video do not necessarily reflect the views of SHGA, and non-SHGA persons appearing in this video do not fall under the supervisory purview of SHGA. You should not treat any opinion expressed by SHGA or Ms. Vingiello as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of general opinion. Nothing presented herein is or is intended to constitute investment advice, and no investment decision should be made based solely on any information provided on this video. There is a risk of loss from an investment in securities, including the risk of loss of principal. Neither SHGA nor Ms. Vingiello guarantees any specific outcome or profit. Any forward-looking statements or forecasts contained in the video are based on assumptions and actual results may vary from any such statements or forecasts. SHGA or one of its employees may have a position in the securities discussed and may purchase or sell such securities from time to time. Some of the information in this video has been obtained from third party sources. While SHGA believes such third-party information is reliable, SHGA does not guarantee its accuracy, timeliness or completeness. SHGA encourages you to consult with a professional financial advisor prior to making any investment decision.
Other Posts By This Author
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