At 89, Arlene Kohen believed she was buying peace of mind.
The Long Island widow sold her home and paid nearly $1 million to join Harborside, a continuing-care retirement community that promised lifelong housing and care. Instead, within months, the facility filed for bankruptcy — and most of her savings vanished with it.
Her daughter, Beverly Kohen Fried, put the loss bluntly. “That’s money that I’ll never see,” she told The Wall Street Journal.
What Happened
Harborside was part of a model known as a continuing-care retirement community (CCRC). Residents pay a large entrance fee up front — often six figures or more — in exchange for housing, services, and access to future medical care. But the model is financially fragile, often depending on a steady stream of new residents to cover debt and operating costs.
Court filings show Harborside was already carrying significant debt when Kohen moved in. When occupancy slowed, the community could no longer stay afloat.
Since 2020, at least 16 CCRCs across the U.S. have filed for bankruptcy, leaving more than 1,000 seniors and families out more than $190 million in lost entrance fees, according to a Wall Street Journal review.
Why It Matters for Seniors
CCRCs are marketed as a “forever home” — independent living now, assisted living or nursing care later. But in many states, they fall into a regulatory gray zone. Oversight is limited, refund policies are inconsistent, and residents often don’t realize how exposed they are until bankruptcy hits.
For seniors, the stakes are enormous: entrance fees can range from $100,000 to over $1 million, often representing the bulk of a life’s savings. When facilities collapse, those funds are typically unrecoverable.
The Bigger Picture
The financial stress at Harborside reflects a wider strain in the retirement housing industry. Rising interest rates have made debt harder to service, while occupancy rates — already weakened by the pandemic — have been slow to rebound.
Consumer advocates argue seniors deserve stronger safeguards, such as required reserve funds or clearer disclosure of financial risks. Some states are now weighing reforms, but protections remain patchy nationwide.
For families like the Kohens, the damage is already done. What was supposed to be stability became uncertainty. And for seniors weighing a move into a retirement community, the lesson is clear: promises of “forever” don’t always hold.
Two Things to Get in Writing
There are two key things every senior (or their family) should get in writing before signing on to a so-called “forever” or “life care” facility:
1. What “forever” really means — in legal terms.
Ask the facility to define the scope of care covered under that promise. Does “forever” include all levels of care — independent living, assisted living, skilled nursing, and memory care — or only some of them?
- You want that spelled out in the residency contract, not just the brochure.
- Also clarify what happens if your health changes and you need more intensive care — do you stay on the same campus, or must you move to an affiliated facility?
2. What happens if the money runs out.
Many facilities imply lifetime security but don’t guarantee it. Seniors should request a written clause describing:
- Whether the facility will allow continued residence if you outlive your assets, and under what conditions.
- What reserve funds (if any) the company maintains to protect residents if the facility’s finances falter — and how those funds are monitored or audited.
If a facility resists putting either of those details in writing, that’s a red flag. A truly reputable operation will have no problem showing the exact contract language or a financial disclosure statement verifying its long-term stability.
Editor's Note: Information from The Wall Street Journal and The New York Post was used in developing this article.
Disclaimer: This article is for informational purposes only and should not be considered financial or legal advice. Seniors should consult qualified professionals before making major financial decisions.
