What Is a Continuing Care Retirement Community?

Care giver holding hands with an elderly client

Most seniors would prefer to stay in the comfort of their own homes. But at a certain point, it just might not be feasible. The average person 65 and older has almost a 70% chance of requiring long-term care, according to the Administration for Community Living (ACL) and the Administration on Aging (AoA). So, it’s likely that you or a loved one will need some care or support along the way. Continuing care retirement communities provide seniors with a range of services, including medical and emotional, that you may find beneficial. Here’s how they work.

A financial advisor could help you create or adjust a retirement plan for your needs and goals.

A continuing care retirement community (CCRC), alternatively known as a life plan community, is a form of long-term care facility for seniors. People need support through the aging process, and most elderly individuals want to stay in place during those years.

A CCRC offers a home-like place for seniors during their golden years while providing access to various amenities and services. In particular, they prioritize healthcare and social activities.

They can be expensive, though. CCRCs charge two main types of costs: an enrollment fee and monthly fees. Generally, the initial payment runs around $300,000 but some can exceed that, reaching $1 million. In terms of a monthly fee, they range from $2,000 to $4,000 usually. Of course, there may also be additional fees in the form of pet deposits, parking, storage, etc.

Additionally, you can get estimates of the cost of care through a Genworth calculator. For example, the group estimates assisted living facilities to cost a yearly national median of $53,148 in 2021. You can find their Cost of Care Survey calculator here.

Four Types of Continuing Care Retirement Communities

There are different levels of care at a CCRC. Generally, CCRCs offer three to four varieties, but it depends on the facility. The four types you might run into include:

Independent living: Seniors live in their own unit, like an apartment, but no longer want to deal with homeownership. They can still take care of their own needs, including activities of daily living (ADL). But, staff may help with certain chores. Residents still have access to the community, the various services, social outings and more.

Assisted living: Seniors don’t typically go from independent to dependent in one day. It’s usually a process. Assisted living supports that transition, so seniors can still enjoy such independence as they are able to. However, they usually receive some more day-to-day assistance in the form of housekeeping, transportation, basic care or medication management.

Memory and Alzheimer’s care: According to the Alzheimer’s Association, millions of Americans currently live with some type of dementia. The organization estimates in its 2021 Facts and Figures Report that approximately 6.2 million Americans 65 and older living with dementia. And, more than 1 in 9 individuals in that age range have Alzheimer’s.

Memory care specializes in aiding individuals like these, providing emotional and medical support. Many function like a private home, where seniors can participate in daily activities but with emergency staff available 24/7.

Skilled nursing: Skilled nursing has multiple purposes and offers both short-term care and long-term care. For example, they often host several rehabilitative services for seniors after a hospital stay. So, if an elder underwent surgery or suffered a stroke, skilled nursing can support them as they heal. Alternatively, many seniors need round-the-clock care. Perhaps they have a degenerative disease or a chronic condition. They can receive advanced medical care through this level while still enjoying a home-like environment.

Benefits of a Continuing Care Retirement Community

CCRCs are a popular choice for many. They provide peace of mind for families and residents alike. Here are five reasons why it might be the right path for you or your loved one:

Healthcare access: CCRCs have built-in healthcare support systems. That provides an extra layer of security for residents, particularly those with conditions or diseases. They typically provide a variety of care, too, such as skilled nursing, assisted living and memory care services. Residents can easily transition to the next level of care thanks to this.
Social network access: Residents are around similarly aged people who share the same interests. The CDC (Center for Disease Control) and NASEM (National Academies of Sciences, Engineering and Medicine) claim older adults are exposed to a higher rate of loneliness and social isolation, which can put their health at risk. So, the social interaction and activities, like outings and travel, are a crucial part of senior care.
All-inclusive: CCRCs offer both healthcare and social activities because they’re all-inclusive. And they come with various other amenities, similar to a resort. Residents can still enjoy their independence, but they have access to transportation, meals, laundry, security and more.
Flexible for family: CCRCs can accommodate partners or spouses with different needs. So, if a couple moves in and each one has different medical or care needs, the CCRC can support them without separating them. Even if one spouse must move into a facility with higher care, they’re still able to see each other every day.
Peace of mind: The most important thing to family and loved ones is the knowledge that their relative is doing well, feel cared for and are happy. Families often lack the experience or knowledge to help aging family members. A CCRC preserves their independence for as long as possible while providing the support they need.

Drawbacks of a Continuing Care Retirement Community

CCRCs are the solution for many seniors, but not all of them. Here seven reasons it may not work for you or your loved one:

Research time: Since you or your family member would live there long-term, you want to choose the right place. But a community that offers all the types of care you need, opportunities, nursing and an affordable cost may be hard to find. So, you have to research and tour multiple communities, investigating every aspect. That includes staff, response times and more. It’s sometimes possible to spend an overnight to see how the CCRC operates.
Adjustment period: It’s usually difficult for anyone, not just seniors, to leave behind their old life and family. And while CCRCs try to make the community supportive and welcoming, it’s still a hard transition.
Inconsistent: You want to find a CCRC with great accommodations across the board. But sometimes, it’s difficult to find a balanced facility. For example, if your relative is unwell, you may look for a CCRC with strong nursing care. But, you find the other areas are lacking, like social enrichment.
Seniors only: Some long-term care facilities actually accept people of various ages. However, CCRCs generally only take in senior citizens. That might not be right for some retirees, who enjoy being around a mix of people.
Planning: You can’t just pack up and move. Residents have to sign a contract and move in while they’re still independent. They also need to make decisions about their living situation and healthcare, which can be difficult.
Cost: CCRCs can be costly, particularly due to their high entrance fee and monthly maintenance fees. This, combined with a low fixed income, make it unaffordable for many seniors.
Financial risk: The entrance fee may be non-refundable, even if the resident passes or moves away. Along with that, the CCRC might not be financially sustainable and close. Then the residents lose the money they put into it, possibly leading to bankruptcy.

How to Find a Continuing Care Retirement Community

There are a couple of resources available that can help you find local CCRCs. One of the first places you should try looking is the federal government’s eldercare locator. You can either check their online database or call their number at 1-800-677-1116. Through them, you can get in contact with your local Area Agency on Aging, which can tell you about CCRCs near you.

You can also use LeadingAge, an association for nonprofit senior care providers that provides an Aging Services Directory. Simply input your state and ZIP code to see a list of communities that operate as nonprofits.

If those don’t work, consider searching online through the Yellow Pages website or using a referral service. Two popular options that do this are SeniorLiving.org and Caring.com.

What to Look for in a Continuing Care Retirement Community

After you gather a list of communities worth consideration, you can narrow down your search. Filter your choices with characteristics you want to see in your prospective CCRC. Here are nine topics and questions to get you started:

Location: How close is the CCRC to the hospital and the resident’s doctors? Are there stores and amenities nearby?
Residents: Does the community enjoy living there? Is their independence respected?
Housing. What options are available? Does the residence include all the things you’re looking for, such as appliances, safety features, outdoor space and emergency routes and measures?
Staff: What is the professional reputation of the staff? Do they have sufficient training and an appropriate attitude? What hours does the administration work and when are they available to help?
Healthcare: What levels of healthcare are available, and do you need to pay extra? Is there specialized care for certain conditions? Do residents have access to an on-site pharmacy. Does staff monitor medication?
Social activities: Is there a rotating schedule of social events and activities? Can residents take part in travel? Is there access to exercise facilities and places of worship?
Recreation: Are there common areas for residents to get together? Do these areas offer entertainment, like movies, games or puzzles?
Personal services: Is there help for residents living independently? Are there on-site services, such as laundry, a salon or transportation? Do they cost extra?
Possible violations: Has the facility you’re interested in faced state regulatory violations, disciplinary measures or litigation over alleged elder abuse?

What to Know About the Continuing Care Retirement Community Contract

Even if you find a community you approve of, you still need to sign the CCRC contract. It’s crucial for all parties to go over the contract thoroughly. That way, you ensure you or your loved one receives the right type of care.

These contracts generally come in three models: an extensive life-care contract, a modified contract and a fee-for-service contract.

An extensive life-care contract, also known as Type-A contracts, usually comes with the widest range of services. They provide lifetime access to unlimited amenities and care, from independent living to skilled nursing care. Because of this, they typically run the most expensive. The resident either pays a higher entrance fee or more on their monthly service fee. Essentially, you pre-pay for some of your future health-related services with this. It can help you predict expenses more accurately, but you’re also paying more than you may need.

Modified contracts, called Type-B contracts, come with a more limited list of services. So, your fees pay for some of the cost of care, but not an unlimited amount. It includes most of the amenities and services, but additional costs are needed for skilled nursing or assisted living. These expenses are sometimes offered at a discounted rate. Other times, they may offer a certain number of pre-paid days to use at the healthcare center.

Fee-for-service contracts, or Type-C contracts, come with the benefit of a lower enrollment fee or monthly fee. However, residents pay for individual services, such as memory care, on their own. These costs will match the market rate.

Occasionally, a facility offers a rental contract (Type-D) or a Type-E contract, where residents purchase a share of their unit instead of an entry fee.

No matter which contract you intend to choose, always run it by a lawyer beforehand. They’re typically complex and require careful reading before signing.

Bottom Line

An elderly woman in a continuing care facility

Aging may not always feel graceful, but proper support can make it worthwhile. A CCRC is a way for seniors to access constant care, all while enjoying a welcoming atmosphere. These facilities provide a vast array of services that make it easier to transition out of independence while still living your golden years to the fullest. However, their cost can be a difficult hurdle. If you want to include a CCRC in your long-term plans, consider speaking to a financial planner or advisor. They can help you organize your finances ahead of time.

Tips on Paying for Long-Term Care

Accepting age-related limitations isn’t always easy. There’s so much to plan for, including finances, but you don’t have to do it alone. A financial advisor can help you plan accordingly for your future long-term care goals. SmartAsset’s free tool matches you with up to three financial advisors in your area and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
A quick – and free – way to see if you’ve got enough to retire is by using SmartAsset’s free retirement calculator.
One of the most important traits in a CCRC is the healthcare services. You can pre-empt some of those costs with a health savings account, or HSA. Also known as health IRAs, they allow you to grow money tax-deferred to use on qualifying medical expenses. Read up on the best HSAs out there before starting.