Retirees’ Life Savings Can Vanish in Continuing Care Bankruptcies

Continuing care retirement communities (CCRCs) promise lifetime housing and care for seniors, often requiring substantial upfront deposits with the assurance of refunds if the resident moves or passes away. However, your life savings are at risk when CCRCs file for bankruptcy. Since March 2020, at least 14 such facilities in the U.S. have declared bankruptcy, jeopardizing the financial security of their residents. This trend highlights a significant, often overlooked, risk for seniors who rely on these communities for their long-term care needs.

The financial instability of CCRCs stems from various factors, including mismanagement and market pressures. For example, residents of Henry Ford Village, a CCRC in Michigan, faced the potential loss of their deposits when the facility declared bankruptcy in 2020. These financial collapses can devastate retirees, many of whom have invested their entire life savings into securing a place in these communities, believing it would be their last move.

The impact of CCRC bankruptcies extends beyond financial losses. Residents and their families face significant emotional and logistical challenges, including the stress of finding new accommodations and care. The complex nature of bankruptcy proceedings often leaves them uncertain about the recovery of their funds. As the prevalence of these bankruptcies grows, it underscores the need for better regulation and oversight to protect the financial and personal well-being of the aging population​.

For more information see Akiko Matsuda "Retirees’ Life Savings Can Vanish in Continuing Care Bankruptcies",  The Wall Street Journal, June 13, 2024.