Continuing Care Retirement Communities

A continuing care retirement community (CCRC), sometimes known as a life plan community, is a full-service senior living option that offers a range of care levels within a single location. Seniors start out as independent living residents, with access to assisted living, skilled nursing, memory care, and other services should their health needs change in the future.

Residents of a continuing care retirement community have access to a full continuum of care on the community campus. This allows seniors to age in place and provides peace of mind that they’ll always receive the right level of care should their health needs change in the future. Continuing care retirement communities also take care of home maintenance, giving residents more time to socialize and enjoy the various features and amenities of the community. This can include fitness centers, indoor pools, art studios, woodworking shops, movie theaters, libraries, game rooms, gardening spaces, and so much more!

Most continuing care retirement communities require both an entrance fee and a monthly service fee from their residents. The total cost of these fees vary based on the size of the community, location, amenities, and the types of services offered.

• Entrance Fee – an upfront, one-time fee that can range from a few thousand dollars to over $1 million. The average entrance fee for a CCRC is $329,000. Many people use the equity in their home to fund this cost. A portion of the entrance fee may be refundable, depending on the type of contract a CCRC offers.
• Monthly Service Fee – a monthly service fee covers the services and amenities associated with living in the community. The sum depends on the size of your residence, how many people live there, and the range of services and amenities available to you.

The three most common CCRC contract types are:

• Type A Contracts (Life Care): provides care for residents for the rest of their lives without significantly increasing their monthly fees. If the need arises for a higher level of care, the resident may transfer to the appropriate level of care at a predetermined, discounted monthly rate, for as long as care is needed. Many life plan communities offer partially refundable entrance fees, where a portion of the entrance fee is refunded to you or your estate.
• Type B Contracts (Modified Plan): usually requires a lower monthly fee than Type A, and possibly a lower entrance fee. However, if you move to a higher level of care, such as assisted living or skilled nursing, you’ll be responsible for more of the cost.
• Type C Contracts (Fee-for-Service): a fee-for-service contract typically requires the lowest monthly fees and possibly the lowest entrance fees. However, if higher levels of care are required, the monthly fee will increase to reflect the market rate.

Depending on the community, there may be additional CCRC contract types available, such as:

• Rental Contracts: a more flexible contract option that is typically structured as a month-to-month arrangement and does not require an entrance fee. Residents pay a monthly rate to cover their living accommodations and are responsible for covering their healthcare expenses out of pocket.
• Equity Contracts: a unique contract option where residents have ownership of their home within the community, but typically have to pay for healthcare expenses out of pocket. Residents also pay a monthly service fee or a homeowner’s association payment in addition to property taxes.