It scared me because my parents were looking into a buying into a retirement community where you have a "guaranteed" payout amount depending on how many years you stay; that payout amount slowly declines over time to something like 80%.
The deal is clear. Pay a bunch of money to buy in. Pay pretty high monthly maintenance fees. They handle everything else. Food, medical care, etc. If you need long term care, dementia, etc.
Then if/when you want to move out you get between 100% and 80% paid back out, depending on when you leave. (And, presumably, it works the same way for your heirs).
They make money on:
* The spread between what you pay as maintenance fees and what it actually costs to support you
* The (hopeful, for them) appreciation in the market value of the housing you 'buy' (which is an incentive to keep the community desirable).
* The decline in "ownership" % you have over time.
And of course ultimately they're gambling that you won't have an incredibly long, expensive decline, but will die relatively quickly once the costs mount.
This all makes sense, because it's a form of risk pooling.
But it was infuriating that someone could come along and buy out the place and just alter the terms. I still don't understand why/how it's legal, it seems like that should only be allowable under something like bankruptcy.
This is the same at every level of society. Those millionaires buying a comfy retirement have never been worried about the bottom rungs of society and the lack of legal support, healthcare, the difficulties with police etc
Turns out that the forces that drain the working population are now after the comfortable ones. Won’t take long for exponential growth to eat through the 50-90%ile, and in 10-15 years it will be the 90-99% that are bled dry, and 5 years after that the 1% start cannibalising themselves.
Yep, any alteration of terms should require consent or full refund. That is only fair. But currently America is a crooked corrupt country so I am not holding my breath.
https://www.youtube.com/watch?v=xnWYh7N5goE
It scared me because my parents were looking into a buying into a retirement community where you have a "guaranteed" payout amount depending on how many years you stay; that payout amount slowly declines over time to something like 80%.
The deal is clear. Pay a bunch of money to buy in. Pay pretty high monthly maintenance fees. They handle everything else. Food, medical care, etc. If you need long term care, dementia, etc.
Then if/when you want to move out you get between 100% and 80% paid back out, depending on when you leave. (And, presumably, it works the same way for your heirs).
They make money on:
* The spread between what you pay as maintenance fees and what it actually costs to support you
* The (hopeful, for them) appreciation in the market value of the housing you 'buy' (which is an incentive to keep the community desirable).
* The decline in "ownership" % you have over time.
And of course ultimately they're gambling that you won't have an incredibly long, expensive decline, but will die relatively quickly once the costs mount.
This all makes sense, because it's a form of risk pooling.
But it was infuriating that someone could come along and buy out the place and just alter the terms. I still don't understand why/how it's legal, it seems like that should only be allowable under something like bankruptcy.