Do all retirement communities offer similar promises?
No, some retirement communities operate on what are known as non-refundable amortized entry fees and others offer refundable entry fees at a fixed percentage rate. Amortized entry fees melt away at a certain rate per month, often in the range of 2 percent. A resident who pays a $200,000 entry fee would be entitled to a refund of $196,000 after one month, or $192,000 after 2 months and so on. After 50 months, there would be nothing left to refund. Communities with refundable entry fees typically set refunds at 50 to 90 percent of the initial payment, with no time limit. If the contract called for a 90-percent refund, a resident who paid $200,00 at entry would receive a refund of $180,000. At 50 percent, the refund would amount to $100,000. The resident would not be entitled to any appreciation in value. Is there a guaranteed profit or guaranteed 100-percent equity repayment when a Carolina Meadows residence is resold? No. As with real estate on the outside, values are determined by mark
