You're only as secure as the retirement home

If the demand for apartments at an Erickson community is weak, the community may have an incentive to fill units that have never been occupied before it finds a new tenant for yours. If you have to wait for your money, you may not have access to the funds you would need to move somewhere else. Instead of keeping deposits in the bank, an Erickson contract says that the community will use them -- to finance development, make repairs or repay someone else.

As of September, almost a third of the completed units were vacant at Ashby Ponds, where, as of August, entrance deposits ranged from $200,000 for a one-bedroom unit to $563,000 for a two-bedroom unit, according to regulatory and court filings.

Even before Erickson's bankruptcy, the Senate's Special Committee on Aging had asked the Government Accountability Office to study whether CCRCs are adequately regulated.

"In effect, seniors choosing CCRCs today could be exchanging their assets and income for nothing more than a promise," Chairman Herb Kohl (D-Wis.) wrote in February.

Of course, entrusting your nest egg to a retirement community isn't the only or easiest way to lose it. Putting money in real estate or stocks can end badly, too.

But for residents of troubled communities outside the Erickson empire, Kohl's concerns are hardly hypothetical.

In Northwest Washington, some residents of Ingleside at Rock Creek thought the deposits they paid years ago under "life care contracts" limited the fees they would have to pay for the rest of their lives, according to family members. They were upset when, under financial stress, Ingleside introduced new "ancillary" fees in January for items such as incontinence care, protein supplements and injections.

Ingleside's trouble was that the cost of caring for its residents was outstripping the fees they were paying. "There was a business model here that wasn't sustainable," said Richard Woodard, chief operating officer of the nonprofit.

Wendy Schaetzel, who helps coordinate an Ingleside families group, said the ancillary charges added $955 to the February fee for her 93-year-old mother, Imogen, bringing the total for the month to $4,040. Schaetzel said her family was willing to pay more to support Ingleside, but she added: "It's a very significant bite for a lot of people."

In Mount Lebanon, Pa., residents of Covenant at South Hills saw their deposits wiped out under a September bankruptcy court ruling. The community, which had been sponsored by the Jewish organization B'nai B'rith International, was sold to Concordia Lutheran Ministries.

The commonly held notion that residents will be repaid out of future deposits "is quite frankly proving to be a dangerous presumption," said Concordia chief executive Keith Frndak. Residents of the Mount Lebanon community were out of luck because in bankruptcy court their claims ranked behind those of banks and bondholders, Frndak said.

Another casualty of the bankruptcy is the community's kosher kitchen, but the new Lutheran owner has promised to make dietary accommodations.