The Learning Cycle

Key Takeaways

  • When you commit to writing down and discussing your goals with others, you increase your odds of achieving them.
  • A learning cycle is a great technique for personal performance optimization—it requires you to think about and discuss your goals, write them down, and then plan and execute them.
  • Don’t forget our Open House on November 9 at our new Naples, Florida, office.

Financial Planning for Those Who Don’t Want to Think About a Retirement Community for Another 10 Years

Why Thinking about Financing a Continued Care Retirement Community now Might Reduce your Risks


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As the leading edge baby boomers enter their 70s, they’re beginning to plan for the next phase of life.  Ensuring their assets survive them and not becoming a burden to their children represent two of their top financial planning priorities. Experts estimate that as people advance past age 65, 70% will experience a long term medical need during their lifetime (US Dept. of Health & Human Services). On average, men have a long term care need of 2.2 years and women 3.7 years.

Distribution and duration of long-term care services

Type of care Average number of years people use this type of care Percent of people who use this type of care (%)
Any Services 3 years 69
At Home
Unpaid care only 1 year 59
Paid care Less than 1 year 42
Any care at home 2 years 65
In Facilities
Nursing facilities 1 year 35
Assisted living Less than 1 year 13
Any care in facilities 1 year 37

The psyche of the boomer generation is eternally young, optimistic, and fully engaged in life. The thought of growing old and one day needing some type of long term medical care — either at home or in a skilled care nursing facility — doesn’t align with this mindset. That’s why many early boomers are beginning to consider a Continued Care Retirement Community (CCRC) for their later years.

Living in a Continuing Care Retirement Community (CCRC) comes with a number of key benefits. To fully appreciate these benefits, it’s important to understand what a CCRC is and what it is not.

Simply put, a CCRC is a particular type of retirement community that offers several levels of health care on one campus:

  • Independent Living for residents who don’t need personal assistance (some states refer to this as ‘Residential Living’).
  • Assisted Living for people who require a little help with the activities of daily life (some states refer to this as ‘Residential Living’ or ‘Extended Living’).
  • Memory Care (some places refer to this as ‘Special Care’).
  • Skilled Nursing and Rehabilitation (both short- and long-term) in an on-campus health care center.

Most CCRCs require residents to pay a large upfront deposit that can range anywhere from $250,000 to $1,500,000; 50%-90% of which the CCRC refunds to the estate at death or upon leaving the facility. In addition, residents pay a monthly fee for support and meals. A percentage of the upfront and monthly fees are tax deductible on Schedule A under Medical Expenses. Someone considering a CCRC should seek counsel from a financial and tax advisor to take advantage of this deduction, which may involve converting a portion of an IRA to Roth IRA.

Often, retirees who have enjoyed a successful career life have difficulty raising cash without incurring a substantial income tax liability; since many of their assets are retirement plans and low basis stocks/mutual funds. To avoid this issue, we advise clients to establish an expanding line of credit with a Home Equity Conversion Mortgage (HECM), long before considering a CCRC.  A HECM can provide tax free cash to help finance a down payment for a CCRC.

Advantages of a HECM

  • Easy to qualify – no credit score or earned income requirements
  • Government backed – insured loan
  • Monthly payments not required – although interest and insurance accrue
  • Non-recourse provision – this ensures the borrower can never owe more on the loan than what the house is worth when loan is repaid
  • Line of credit can never be frozen – as long as borrowers meet the terms, the lender can never freeze, reduce, or cancel the credit available

So, what’s the catch to the HECM?

After hearing about the advantages a HECM offers, most people wonder about a catch. Until recently, high upfront expenses and ongoing fees created a major disadvantage to the HECM. These expenses and fees could add up to thousands of dollars. That’s no longer an issue. Eligible individuals can set up a HECM for as little as $125 up-front cost. Interest and HUD insurance on the amount borrowed create the only ongoing expenses. If nothing is borrowed, there are absolutely no ongoing fees.

Case Study

Rick and Cathy, both 62 years old, recently relocated to Naples, FL after they retired from full time employment. They paid cash for their new residence worth $650,000. They plan to sell their Naples residence in 12-15 years and move into an upscale Continued Care Retirement Community. They met with their financial advisory team and budgeted $1.2 million for their lump sum payment in the CCRC.

While traditional wealth advisors tend to focus on investments, cash flow projections, and income taxes; Rick and Cathy’s wealth advisor encouraged them to establish a HECM. The couple would initially qualify for an expanding line of credit of $327,762; which will grow annually at approximately 6%. In 15 years, the line of credit will grow to $828,729, available for them to access tax free.

Year Age Remaining Line of Credit Home Value Net Home Value
1 63 $348,671 $676,000 $628,680
5 67 $446,522 $790,824 $735,467
10 72 $608,314 $962,159 $894,808
15 77 $828,729 $1,170,613 $1,088,670

If, in 15 years, the financial landscape makes it imprudent to liquidate a portion of the portfolio, or if liquidating the portfolio would create an adverse tax event, the HECM could serve as a ‘bridge loan’. Also, what if the line of credit is greater than the fair market value of their home?  In this case, Rick and Cathy could take 100% of the credit line, sell their home and walk away.

A HECM might be appropriate for a variety of different planning needs. Learn more about HECM and how they can be used to prepare for the cost of long term medical care. The HECM is a proactive financial planning tool, it’s highly advisable that anyone approaching age 62 seek objective financial counsel. An experienced advisor will assess the client’s overall financial landscape, consider all available assets, and develop a personalized financial plan.

Make sure you are not leaving retirement planning to chance

Learn more about HECMs and if they might benefit your financial situation by contacting Rob O’Dell at Coyle Financial Counsel. Discover a better way to manage your finances.

Our proprietary approach, TransformingWealth™, is designed to get your arms around the big picture so you can make informed financial decisions with conviction. Ask Rob about Coyle’s TransformingWealth Preview Meeting, and schedule a complimentary consultation and start living the Good Life Managed Well™.


Rob O’Dell, CFP®, serves clients in our Naples, FL office. With more than 20 years of personal financial planning experience, Rob knows that successful financial planning involves a distinct process, not a one-time event.

Rob has been featured in the Wall Street Journal, Financial Planning Magazine, The Daily Herald and Money Magazine. He was a contributing author on the Third Edition of the Florida Domicile Handbook. Learn more about Rob O’Dell.
800-480-7913 |

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The Charitable Double Benefit

Key Takeaways

  • Give generously, but also give smartly.
  • There are a myriad of tax-advantaged ways to give to organizations and causes you support.
  • Planned giving can get complicated, so consider hiring an estate planner, wealth manager or other seasoned financial professional to help you find the technique that best suits your needs.

The “Do Over” Economy

Key Takeaways

  • The best money habit you can have is to save first and spend second.
  • Today’s freelance “gig” economy gives millions of talented people the opportunity to earn extra money on a flexible schedule that they can control.
  • Today’s gig economy also gives many people a second chance to get their adult money habits right.