July 24

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How Much Do Continuing Care Retirement Communities Really Cost?

By Harrison O'Reill

July 24, 2023


Are you considering a continuing care retirement community (CCRC) for yourself or a loved one? One of the most important factors to consider is the cost. CCRCs offer a range of services and amenities, from independent living to skilled nursing care, and the cost can vary depending on the level of care needed.

How much will it cost? How come it has come to that set of numbers? How do you pay for it? These questions are to be answered in this article. Stick around and become more knowledgeable at the end!

What are Continuing Care Retirement Communities?

Continuing Care Retirement Communities (CCRCs) are senior living communities that provide different levels of care, from independent living to assisted living to skilled nursing care, all on one campus. They are designed to provide a continuum of care as residents’ needs change over time.

Types of CCRCs

There are three types of CCRCs: Type A, Type B, and Type C. Type A, also known as Life Care, is the most expensive but provides the most comprehensive care. It includes unlimited access to all levels of care, regardless of whether or not the resident needs it.

Type B, also known as Modified, includes a set number of days of skilled nursing care, after which the resident must pay out of pocket.

Type C, also known as Fee-for-Service, requires residents to pay for each level of care as they need it.

CCRCs typically require a significant upfront entrance fee, which can range from $100,000 to over $1 million, depending on the type of contract. In addition, residents typically pay a monthly fee that covers amenities and services such as meals, housekeeping, and transportation.

Factors Affecting CCRC Costs

When it comes to continuing care retirement communities (CCRCs), the cost can vary widely depending on several factors. Here are some of the main factors that can affect the cost of a CCRC:

Location

Location is one of the biggest factors that can affect the cost of a CCRC. CCRCs located in major cities or affluent areas tend to be more expensive than those in more rural or less affluent areas. This is because the cost of living tends to be higher in these areas, which can drive up the cost of services and amenities.

Type of Accommodation

The type of accommodation you choose can also have a big impact on the cost of a CCRC. For example, a larger apartment or villa will generally cost more than a smaller unit.

Additionally, some CCRCs offer different levels of care, such as independent living, assisted living, and skilled nursing, and the cost will vary depending on the level of care you need.

Services and Amenities

The services and amenities offered by a CCRC can also affect the cost. CCRCs that offer more extensive services and amenities, such as gourmet dining, fitness centers, and swimming pools, will generally be more expensive than those that offer more basic services and amenities.

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Size of the Community

The size of the CCRC can also affect the cost. Larger communities tend to have more extensive services and amenities, which can drive up the cost. Additionally, larger communities may have more staff, which can also increase the cost.

Entrance Fees

Most CCRCs require an entrance fee, which can vary widely depending on the community. Entrance fees can range from a few thousand dollars to over a million dollars, depending on the size and location of the community, as well as the type of accommodation and services offered.

Cost Breakdown of CCRCs

When considering moving to a Continuing Care Retirement Community (CCRC), it’s important to understand the cost breakdown. Here are the main expenses you can expect to encounter:

Monthly Fees

Monthly fees cover things like utilities, maintenance, and services such as housekeeping and transportation. These fees can range from a few hundred to a few thousand dollars per month, depending on the level of care and amenities provided.

Entrance Fees

CCRCs typically require an entrance fee, which is a one-time payment made when you move in. This fee can range from tens of thousands to hundreds of thousands of dollars, depending on the community and the type of contract you choose.

Healthcare Costs

CCRCs offer different levels of healthcare services, from independent living to skilled nursing care. The cost of healthcare services will depend on the level of care needed and the type of contract you choose. Some CCRCs offer a Life Care contract, which includes healthcare services at little to no additional cost.

Other Fees

Other fees may include things like dining fees, activity fees, and additional healthcare services not covered by the contract. These fees can vary widely depending on the community and the services provided.

Ways to Pay for CCRCs

When it comes to paying for a continuing care retirement community (CCRC), there are several options available to you. Here are some of the most common ways to pay for a CCRC:

Life Care Annuity

A life care annuity is a type of contract that you sign with a CCRC. Under this agreement, you pay a lump sum upfront, and in return, the CCRC agrees to provide you with housing, meals, and healthcare for the rest of your life. This option can be expensive, but it provides peace of mind knowing that you will be taken care of for the rest of your life.

Rental Agreements

Another option is a rental agreement. With this option, you pay a monthly fee to live in the CCRC, and the fee covers housing, meals, and healthcare. This option is more flexible than a life care annuity because you can move out at any time. However, it can be more expensive in the long run.

Fee-for-Service

Fee-for-service is another option. With this option, you only pay for the services you need, such as healthcare or meals. This option can be less expensive than a life care annuity or rental agreement, but it can be more unpredictable because you never know how much you will need to pay for services in the future.

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Combination Plans

Finally, some CCRCs offer combination plans. These plans combine elements of the other options, such as a life care annuity and a rental agreement. For example, you might pay a lump sum upfront and then a monthly fee for the rest of your life. This option can provide the best of both worlds, but it can also be the most expensive.

Researching CCRCs

When researching continuing care retirement communities (CCRCs), there are several important questions to ask.

Firstly, you should inquire about the types of contracts that are available, such as rental, life-care, or fee-for-service. Additionally, you should ask about the community’s financial stability and any requirements for entrance fees or deposits.

Visiting CCRCs in person is also important to get a feel for the community and its amenities. During your visit, you should take note of the cleanliness and upkeep of the grounds, the quality of the staff, and the variety of activities available. It’s also important to speak with current residents to get an idea of their experiences living in the community.

Evaluating costs is another crucial aspect of researching CCRCs. You should obtain a detailed breakdown of all fees and expenses, including entrance fees, monthly fees, and any additional costs for healthcare services. It’s important to compare costs between different CCRCs to ensure you are getting the best value for your money.

Overall, researching CCRCs requires careful consideration and attention to detail. By asking the right questions, visiting communities in person, and evaluating costs, you can make an informed decision about which CCRC is the best fit for your needs and budget.

Conclusion

In summary, continuing-care retirement communities can be a great option for seniors who want to enjoy their retirement years without worrying about home maintenance and healthcare costs. However, the cost of these communities can be high, and it’s important to carefully consider your financial situation and priorities before making a decision.

When comparing the costs of different continuing care retirement communities, it’s important to look beyond the monthly fee and consider factors such as entrance fees, healthcare costs, and potential increases in fees over time. You should also consider the amenities and services included in the monthly fee and whether they align with your lifestyle and preferences.

Ultimately, the decision to move to a continuing care retirement community should be based on your personal needs and goals, as well as your financial situation. By carefully weighing the costs and benefits, you can make an informed decision that will allow you to enjoy your retirement years to the fullest.

Frequently Asked Questions

Here are some common questions about this topic.

How much does it cost to move into a continuing-care retirement community?

The cost of moving into a continuing care retirement community can vary widely depending on several factors, including the location, size of the living space, and level of care required. Generally, you can expect to pay a one-time entrance fee, which can range from tens of thousands of dollars to over a million dollars, and monthly fees that cover housing, meals, and other services.

Are there any additional costs?

In addition to the monthly fees, there may be additional costs for services such as housekeeping, transportation, and medical care. Some communities offer a la carte pricing, while others have all-inclusive packages that cover most services.

Do continuing care retirement communities offer financial assistance?

Some communities offer financial assistance or have programs in place to help residents who may be struggling to pay their fees. It’s important to research the options available to you and ask about any financial assistance programs during your search.

Can I get a refund if I decide to leave the community?

Many continuing care retirement communities offer a refundable entrance fee, which means that you or your estate will receive a portion of the fee back when you leave the community. However, the amount of the refund and the conditions for receiving it can vary from community to community, so it’s important to ask about the refund policy before you move in.

What happens if I run out of money?

If you run out of money while living in a continuing care retirement community, some communities offer assistance programs to help you cover your costs. However, it’s important to plan ahead and make sure you have enough money saved to cover your expenses for the rest of your life.

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