It’s time to enjoy an active, burden-free retirement with independent living options at Sugar Hill in Wolfeboro, New Hampshire.

Sugar Hill Community Blog

20 June, 2018

Is It Safe for Mom to Invest in a Retirement Co-op?

When it comes to choosing a retirement cooperative (also known as a retirement co-op), there are a lot of factors to take into account: the culture, the location, the amenities, and so on.

But perhaps the most important factor is the community’s financial security. When your parent is considering moving to a co-op, it’s natural to worry about the soundness of the investment. Here are three reasons why investing in a financially sound co-op can be a wise investment.

1. Financial Control

One of the major financial benefits of a cooperative retirement community is that residents have a say in how the community is run. Because of the way that co-ops are structured, residents are co-owners of the corporation.

For example, at Sugar Hill every resident is a shareholder. Additionally, residents sit on the board and have a say in every decision made, meaning residents direct the course of the community.


Related: Gain Control of Your Future with a Cooperative


2. Future Financial Planning Made Easy

Retirement co-ops offer stable, predictable monthly fees, making it easy to plan for the future.

This is partly because of the unique co-op structure. As we discussed above, residents get to decide what happens in their co-op. This means not having to worry about huge spikes in monthly fees. Instead of a nameless, faceless corporation calling the shots, residents get to decide what’s best for their community.

Another way co-ops help to make future financial planning is that there won’t be any unexpected fees that might otherwise affect your parent as a homeowner. Although co-ops offer some of the same tax benefits that homeowners enjoy, residents needn’t worry about the hassles and headaches that accompany homeownership. They can plan for the future with confidence, knowing they won’t have to worry about unexpected costs like home repairs or skyrocketing property taxes.

Compare the Costs of Living at Home vs. a Retirement Community with the

Cost Comparison Worksheet

3. Profit Potential

Many people worry that their parents will have to sign over their life savings to a retirement community and never see a dime of it again. However, this isn’t the case with co-ops. For starters, the stock ownership and monthly fees are set rates that aren’t dependent on your parent’s income or savings. Additionally, at most co-op retirement communities, residents are entitled to a sizable portion of the value of a home upon resale.

At Sugar Hill, for example, 92% of the value of your parent’s apartment or cottage will be returned to their estate upon resale. In many cases, the investment appreciates in value.


View Sugar Hill’s Current Available Homes


Evaluating the Financial Security of a Retirement Community

If you’re wondering whether or not your parent should invest in a retirement community, you’re on the right track. When comparing options, it’s a good idea to evaluate the financial stability of each community. After all, not all co-ops are created equal.

The New York Times recently outlined a few ways to evaluate the financial health of a retirement community. Although some of the tips are specific to continuing care retirement communities (for more on that, read Co-ops vs. CCRCs: What You Need to Know), there are a few pieces of advice that are helpful no matter what community you look at, including:

  • Occupancy. If a community has more empty homes than residents, it’s not a good sign. This may indicate a larger problem within the community — in addition to pointing to an uncertain future, it begs the question: why aren’t new residents moving in?
  • Monthly Fee Changes. Have there been large rate jumps in recent years? While moderate monthly rate increases from year to year are normal in most communities, the Times article points out that anything above 3.5 percent per year should raise questions.
  • Financial Statements. When evaluating a community, ask for their financial statements. It’s a good idea to have your financial advisor take a look at them with you.  

Financial Security at Sugar Hill

Unlike most co-ops, Sugar Hill is operated as a for-profit business. With a resident-run board and resident shareholders, you can rest easy that all decisions will be made with residents and fiscal responsibility in mind.

To learn more about the benefits of retirement cooperative living, download our free guide, Why Choose a Co-Op?

What makes a co-op one of the most desirable places to retire?

Why Wolfeboro guide download

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