Continuing Care Residential Communities Can Be Risky

A recent report by the U.S. Senate Special Committee On Aging found that the financial underpinning of the country's continuing-care residential communities -- which basically require residents to turn over a large chunk of their life savings as an entry fee -- "is particularly vulnerable during economic downturns." And nationwide, a number of retirement communities have filed for bankruptcy, putting residents' nest eggs in peril.

The report noted that three of the five companies it investigated -- none identified publicly -- "use entrance fee deposits to repay construction loans" and to "repay other residents or beneficiaries rather than keeping deposits in the bank."

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Continuing Care Residential Communities Can be Risky During Tough Economic Times