Joining a Life Plan community like Kendal-Crosslands is a big financial commitment. Communities are making promises to care for you for years to come, and it’s important that you ask questions about their finances to make sure your investment of money and trust are well placed.

Kendal-Crosslands Communities have been successful for over 45 years and counting. Part of our success has depended on always having our financial home in order, and by being transparent with our residents and prospective residents about our financial health.

We’ve developed a checklist of nine questions you should ask any retirement community you are considering about its finances before making a financial commitment yourself. This checklist will help you choose a community that will be financially sound when you need it most.

To find out more about the costs associated with a variety of Retirement Communities, you can download our free guide, The Bottom Line- Financial facts to Know When Choosing a Retirement Community by clicking the button below.

Nine Financial Questions To Ask A Life Plan Community

Does the Community Have an Actuarial Report?

A Life Plan should conduct financial evaluations through an actuarial report to ensure pricing is appropriate to ensure that future needs of residents are met, along with the overall success of the community.

At Kendal-Crosslands Communities, an actuarial firm conducts routine evaluations to ensure near-term and long-term success of the community. Kendal’s actuary:

  • Assesses the sufficiency of current entrance fees and monthly fees
  • Evaluates the sufficiency of current cash reserves
  • Provides population flow projections that help predict cash from entrance fee turnover
  • Quantifies the overall actuarial health of the organization
  • Provides consultation prior to initial and ongoing pricing of entrance fees and monthly fees

What is the Actuarial Funded Status?

While an actuarial report can provide a lot of information about the financial health of the community, the most important indicator is the actuarial funded status. This status represents the portion of liabilities (future expenses) covered by assets (future monthly fees and reserves). A funded status should be greater than 100%.

What is the Occupancy Rate?

Occupancy levels fluctuate based upon transitions within the community, from independent to assisted living to skilled nursing. However, the main goal for any community should be to be full and stay full. Occupancy rates may also vary on the size of the available living options so be sure to ask detailed questions. For example, in Kendal-Crosslands Communities, we have a long waiting list for our larger cottages, but have some availability in our smaller inventory.

What is the Operating Ratio?

Operating ratio looks at the cash flow generated by operations.

Do you have a Cash Flow Statement?

The cash flow statement shows how much cash is produced from entrance fees, how much cash is used by operations and how much cash is needed for debt service and capital spending. A Life Plan community should be able to provide you with these documents to help you determine their overall fiscal health.

What Debt Are They Carrying?

A community’s cash and investment to debt ratio is often determined by the age of the community. A ratio of more than 100% is desirable.

Balance Sheet

Ask for the financial audit, including the balance sheet, which shows how much cash and investments are available, and the organization’s net available assets.

Profitability, Liquidity & Capital Structure Ratios

The industry uses specific ratios within profitability, liquidity and capital structure to measure the overall financial health of communities.

Is The Community Accredited by CARF-CCAC?

CARF-CCAC looks at more than 1,500 standards, with a full section specifically focused on finances as part of their accreditation and certification process. Of the almost 2,000 Life Plan/Continuing Care Retirement Communities (CCRC) in the United States, under 300 are accredited. While many communities will be licensed under State law, certification and accreditation are voluntary. Certification is required to receive medicare and medicaid funding, but accreditation is an extra level of evaluations and inspections to ensure the community is up to standards. We are very proud that Kendal-Crosslands Communities are CARF Certified.  

“Ultimately, choosing a CCRC comes down to three questions:

Does it offer a lifestyle that is compatible with my needs?

Is it operated on a sound financial basis?

Does it provide the type of care I would want for myself whenever that day comes?”

Brad Breeding

President of My Life Site, Industry expert and nationally-known speaker

Many Life Plan communities look wonderful from the outside. Asking these important financial questions will let you know if the “inside” operations of the community are as wonderful as the beautiful campus and lovely cottages.

Be in the know. Ask the questions. Make sure you’re comfortable with all the answers before you make a commitment. Your long-term happiness and care is our primary concern.