Want Better Retirement Options? Consider a Continuing Care Retirement Community

Adult granddaguhter supporting her senior grandmother when taking her for walk with walker in park in summer. Shutterstock

For people who want a place to retire that offers more than the typical assisted living or independent living centers, a continuing care retirement community (CCRC) may be what you need. These communities are also sometimes called life-plan communities.

In the more traditional settings, your needs change as you age. You may need to be in one center for independent living, then go somewhere else for assisted living, then move again for skilled nursing, then memory care, and so on. A continuing care retirement community enables you to stay in one place and have all your needs met as you age.

Benefits of a CCRC

CCRCs have a lot more benefits than other forms of retirement centers. They can be considered the best options for senior care. They usually have many attractive amenities such as an indoor heated swimming pool, a park, a dog park, fitness facilities, outdoor areas for walking, 5-star meals, space to entertain family members, media rooms, community libraries, a golf course, tennis court, salon, and more.

Each CCRC is a little different. Although they are relatively new, there are about 2,000 of them across the United States, giving seniors a choice of location, comfort, and convenience. Seniors can retire in place and get the services needed for the rest of their lives. They also do not need to be concerned about caring for maintenance, yard work, housekeeping, and transportation.

When you need a new type of service, such as going from independent living to assisted living, you will move to another location within the community. The new location will provide the service you need at the time.

Pay Attention to CCRC Contracts

If you are to have a pleasurable retirement in a continuing care retirement community, paying close attention to the CCRC contract is extremely important. These contracts determine what services you can expect, the terms involved, and what services may be available—for extra money.

The CCRC contracts can be pretty complex, requiring you to get a lawyer to review them to ensure no surprises. There are five types of CCRC contracts, ranging from Type A to E. Type A is the best and most expensive, and it includes all services. Type E is the least costly.

Entrance Fees and Cost

Before moving to a continuing care retirement community, you must pay a rather hefty entrance fee. USNews indicates that this fee may start at about $100,000, but could be as much as $1 million. The average entrance fee is about $410,000. Some of these life-plan communities may refund some of the cost of the entrance fee.

When you move to a CCRC, you can expect to pay the entire bill because Medicare and Medicaid will not help you, except in some circumstances while in assisted living. If you are in an assisted living unit in a life-plan community, it will cost an average of about $6,600 per month. You can use money from a long-term care insurance policy.

When you need services beyond your initial CCRC contract, AARP warns that you may end up paying more for them than you would have if you chose a better contract. Costs are often locked when you sign the contract. When you need more services, you will pay current fees at the time.

People entering a CCRC on a Type A contract, FamilyAssets says, may be guaranteed to enjoy the services even after their money is exhausted. The money will come from the community’s legacy fund. They also may be permitted to enter the community even if they have certain preexisting conditions.

A Health Evaluation Will Be Necessary

Before you are allowed to enter a CCRC, you will likely need a health evaluation. MyLifeSite says you will undoubtedly need one if you want a Type A contract. It will include a questionnaire, a review of recent medical records, a cognitive assessment, and a brief medical exam. The community has the right to reject you if you do not pass the evaluation or if you have some preexisting conditions.

Living Arrangements in a CCRC

Each CCRC may offer a variety of living arrangements, but most include spacious apartments, condos, and single-family residences. The administrators of the CCRC community may decide to move an individual from one type of service to another, rather than the individual deciding. Still, family members may also have a part in the decision.

Things to Know Beforehand

You can use the money from the sale of your home to buy a CCRC unit. ElderLawAnswers says that the IRS will not allow you to roll over your capital gains when you do. Therefore, you may owe capital gains taxes on the gain on sale.

Part of your entrance fee may be refundable if you request it shortly after moving into the community. If you wait too long, you may lose that option. Some of the money may also be refundable if you move out or when you die.

The funds in your entrance fee are considered countable resources by Medicaid—if you are otherwise eligible. In some cases, money may be available to help pay for the monthly living costs in a CCRC.

Best Time to Move to a CCRC

According to Caring, the Housing for Older Persons Act of 1995 requires that CCRCs have a minimum age requirement of 62, but some may suggest you be older. Seniorly recommends that you move in while you are still healthy and active. It will enable you to enjoy the facilities more, make new friends, and take advantage of the available activities longer.

Although a continuing care retirement community may seem like the ideal place to retire, consider several places before deciding. They vary in location and climate, amenities, cost, and availability. Apply while younger and still healthy. Check with your lawyer about the CRCC contract before signing it.

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