Looking for stability in your retirement plan?

Big and small changes you can make for a more reliable financial future

Created date

May 29th, 2020
For Jack Coogan, Seabrook, a fee-for-service continuing care retirement community in Tinton Falls, was the best value and most reliable financial structure because it offers peace of mind and predictability.

When researching retirement living options, one aspect should be at or near the top of your priority list: financial stability. 

“You’ve spent your life saving for these years,” says Samantha Long, certified financial planner with Ameriprise Financial. “Whether you choose to stay in your house or move to a community, it’s important to choose a retirement living option with proven financial strength, value, and reliability to ensure you can meet your basic monthly expenses while managing any investments.”

That said, she stresses that the costs of home ownership must be accounted for in retirement. “If expenses of home ownership, for example, a new hot water heater or air conditioner or even larger expenses like a new roof, are not prepared for, they can severely impact your retirement goals,” she says.

You may have set up a budget before or during retirement, but homeowners are more likely to get hit with unpredictable big bills, says Long, than people who live at a retirement community.

Among retirement communities, there are many differences in the way each one operates. A number of financial structures, in addition to lifestyle and amenity options, exist among area communities.

Exploring options 

The Jersey Shore is home to a variety of retirement living options outside the single-family home. Let’s look at the main differences between each type.

Active adult 55-plus communities typically provide activities and a return on investment, but homeowners are still responsible for home maintenance.

Those who live at a senior rental community don’t buy in to the property, so they don’t receive a return on their investment. They pay one monthly fee to cover their rent and use of on-property amenities.

Life care communities, another option, require a long-term, upfront financial commitment. Residents pay a substantial fixed monthly payment that remains the same as they progress through levels of care.

At fee-for-service communities, residents pay for advanced levels of care only if and when they need it. It’s a financial model that’s both affordable and secure for most retirees. 

No surprises

For Jack Coogan, Seabrook, a fee-for-service continuing care retirement community in Tinton Falls, was the best value and most reliable financial structure because it offers peace of mind and predictability.

Jack lists the one-site medical center, restaurants and convenience market, campus transportation, and emergency assistance among reasons to move, but one of the greatest benefits is Seabrook’s financial structure.

Like many of his Seabrook neighbors, Jack made an important discovery: home maintenance costs as well as all the other hidden costs of owning and caring for a home can add up to more than you expect. 

At Seabrook, he says, “You know what your monthly costs are going to be. There are no hidden costs. There are no surprises.”

Standardizing monthly expenses

Dennise Baldwin, sales counselor at Seabrook, assists people who are deciding to sell their house and move to one of the community’s maintenance-free apartment homes.

“Our monthly service package includes nearly all monthly living expenses in just one check each month that remains the same throughout the year,” Baldwin says.

The predictable monthly service package, which corresponds to the size of each apartment home, includes all home maintenance, professional landscaping, property taxes, 24/7 security, utilities, a flexible meal plan, and use of all amenities like the indoor pool and fitness center.

It also includes snow-clearing services in winter and year-round transportation to and from local destinations like the grocery store.

And when it comes to property taxes, that’s just one more huge expense Seabrook community members worry less about.

New Jersey and neighboring New York claim the top two property tax rates in the nation. In 2019, New Jersey averaged more than $8,953, an average increase of 2.1%—quite a boost from 2018’s average increase of 0.9%. To compare, the average American household spends $2,375 on property taxes each year, according to a February 2020 report by WalletHub.

At Seabrook, the monthly service package includes each apartment home’s portion of property tax, which is divided among all community members based on apartment size and days of occupancy. This way, the tax is spread out over the entire year instead of cut into three large quarterly payments. 

“Our predictable monthly costs give such peace of mind to our residents,” Baldwin says. “They don’t have to worry about which bills have been paid and which need to be paid. It’s convenient and budget-friendly.”

Ensuring a healthy retirement plan

Which, Long adds, is imperative in retirement. “A monthly budget should be strictly followed and reviewed at least quarterly,” she says, adding that a financial plan should also be done annually by a trusted financial professional. 

She suggests reviewing the following to ensure a healthy retirement plan: 

•Your current financial position

• Cash reserves

• Life insurance

• Long-term care

• Retirement 

• Estate planning

Long recommends reviewing your retirement plan sooner rather than later. “Remember, the longer you wait, the more limited your options for change,” she says.

No matter where you are in your retirement timeline, you should give your finances an annual checkup. People are living longer, which means their financial plans are more likely to run out before they do. But the sooner you make adjustments—like standardizing your monthly expenses—the better.