Continuing Care Retirement Communities

Continuing care retirement communities (life plan communities) are centered around residents’ interests. Fitness centers, indoor pools, woodworking shops, art studios, well-stocked libraries, movie theaters, game rooms, multiple dining venues and gardening spaces are just a sampling of the amenities commonly offered.

Social isolation is a serious concern for older adults who live alone at home. At a CCRC, days are filled with programs, activities, clubs, events and more allowing for connection with others. There is always something fun to do – and people to have fun with. At a life plan community, maintenance is taken care of allowing more time to enjoy fun things. Most communities also offer meal plans, so there’s no need to cook – unless you desire to.

In a study conducted by the Mathers Institute of more than 5,100 residents from 80 CCRCs (life plan communities), researchers evaluated the health and well-being of residents at these communities compared with those living in the community at large. Residents of CCRCs were found to:

• be more satisfied with life,
• have greater sense of control over their lives,
• have more social contacts and connections, and
• exercise more regularly, maintain a healthier diet and sleep better.

While pricing varies depending on things like size of community, location, and the services and amenities offered, most life plan communities require:

• 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 best way to understand the financial contracts offered at communities you’re interested in is to visit the community and talk with the team. They can help you fully understand the pros and cons of each contract to help determine what might be best for you.
In the meantime, here is a broad overview of the contract types:

• Type A, 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 communities offer partially refundable entrance fees, where a portion of the entrance fee is refunded to you or your estate.
• Type B, 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, 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.
• Rental: Rental contracts require no entrance fee or a nominal community fee. If a higher level of care is needed, you’ll pay the full market rate.