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TESS VIGELAND: One lesson we can all take away from the events of the past year is that there are no guarantees. Your home value won't always go up. Neither will the stock market. But at least if you're, say, younger than 60, you've got time to make up for losses on both those fronts. If you're nearing or in retirement, you don't have that time. And that's forcing a lot of change on folks who thought they had done all the planning they needed to do.
Ashley Milne-Tyte has our story.
Hilde Sager: Hi, Pam. How are you? Good, good. Hi, Ginny. I can see you with curlers in your hair.
Ashley Milne-Tyte: Marketing director Hilde Sager is giving me a tour of the campus at Masonicare. It's a nonprofit company in Connecticut that runs retirement housing for seniors. She chats to residents and staff as she shows off the dining hall, the pool hall, even the beauty parlor.
Sager: I can see you but you can't see me. You look good!
This part of the campus, Ashlar Village, is the fancy bit. You pay a so-called entrance fee of at least a $100,000 to get a cottage or apartment here, plus monthly rent. Sager shows me round one of their new apartments.
Sager: Master bath with the walk-in shower with the seat. Notice grab bars for safety.
It's almost 1,500 square-feet with lots of sunlight, two bedrooms and walk-in closets.
Masonicare CEO Steve McPherson says a few years ago . . .
Steve McPherson: These would have been sold and we would have had a wait list for them.
As it is, 15 of the 70 new apartments are still available. Masonicare isn't the only senior living facility in this position. Occupancy rates at residences around the country are down by several percent on average. The lousy housing market is trapping older people in their current homes.
Nancy Pfeiffer: I'm Nancy Pfeiffer.
Nancy is 87. To raise the $300,000 entrance fee for their apartment here, she and her husband Dag put their house of 44 years on the market in February of last year. Dag says six months later they were getting desperate.
Dag Pfeiffer: Dag: And we bought a little statue of St. Joseph, and we . . .
Nancy: . . . off the Internet . . .
Dag: . . . and we put him in the ground upside down and he didn't like it. And I said, "You help us sell and I'll get you out of here."
Nancy: I can't believe this, 10 days after we bought this statue and planted him, we got these two offers!
They got a lot less than they wanted. But it was enough to let them move in to Masonicare. Nancy says at times they worried about the future.
Nancy: We were debating whether we would move, and some people I know have not been able to move, because they haven't sold their house.
The prospect of having their intake eroded by a faltering economy has prompted Masonicare and other companies to offer assistance to prospective residents. Some are helping to stage homes for sale. Others are offering discounts on their entrance fees. But it's not only prospective residents who are struggling.
The sharp drop in the stock market is hurting some people inside the walls. The value of their retirement portfolios has taken a hammering. And that's affecting their quality of life.
Masonicare resident Ann Behler is 73. Her husband died last year. When he got sick, she sold off a chunk of her IRA to help finance his medical bills. Later, she was hit with a hefty tax bill for that sale. Then the markets plummeted.
Ann Behler: And since then, my IRA has gone down to $24,000 and right now my income is less than my outgoing. So I'm forced to move into a studio apartment now.
Ann says she never anticipated hitting financial trouble at this age. But even in a healthy economy it's not unheard of for seniors to outlive their resources.
Richard Grimes is CEO of the Assisted Living Federation of America. With assisted living, seniors who are too frail to live at home rent an apartment for around $3,000 a month and can get help with daily tasks, like bathing or dressing. They don't pay an entrance fee.
Grimes says each year about 6 percent of residents in those communities end up having to move out because they're running low on funds.
Richard Grimes: What the community does first is to try to help them get their financial house in order so that they can stay, ideally. And if they can't stay, then they try to help them find another community that they can afford.
But communities aren't always that helpful. New Jersey's Public Advocate has criticized an assisted living company there for serving residents in their 80's and 90's with eviction notices when their money was about to run out. In at least one case, those dwindling funds were related to last year's stock market drop.
But Grimes says the downturn is bringing one unexpected benefit.
Grimes: The silver lining in what's happening in the economy is that it's easier to keep staff. It's easier to find good, qualified staff. Nurses are coming back to work in assisted living.
Senior living companies hope that situation will continue, because they know they'll need more staff in the coming years. Right now about 20 percent of people 75 and older live in some kind of senior housing. But the number of people in that age group is rising every year.
I'm Ashley Milne-Tyte for Marketplace Money.