Learn About CCRCs

Continuing Care Retirement Communities, or CCRCs, are an increasingly popular, but often complex, retirement living choice among retirees who are independent today but want to plan ahead for their future housing and healthcare needs. With proper planning, moving to a CCRC should be the last residency decision a person ever has to make, regardless of unforeseen health situations.

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What is a Continuing Care Retirement Community?

Almost all 55+ retirement communities— including Active Adult Living, Independent Living, Senior Apartments, and Senior Co-Ops— serve those who are either able to live completely independently or who require only limited assisted living services. Yet, if a more advanced level of care is required the resident may eventually need to move to an off-site health-care facility.

A Continuing Care Retirement Community— often referred to as a “CCRC” or “Full Service Retirement Community”— is the only type of retirement community that provides services spanning the continuum of care. CCRCs cater to active retirees who are able to live independently today but who seek the peace of mind that comes with living in a community equipped to provide necessary health care services in the future; thus reducing potential stress and hardship for the resident and other family members.

In its truest form a Continuing Care Retirement Community contractually guarantees access to a full continuum of care; usually for a period of time greater than one year and sometimes for life. The contract between the community and the resident is typically referred to as a “Residency and Care Contract.” Alternatively, some CCRCs provide access to health care services but do not contractually guarantee such services for any period of time.

All CCRCs are not alike and many require an entry fee in exchange for access to health care services. Choosing the right community is an important decision. If you are considering a Full Service Retirement Community be sure to inquire about the type of residency contract(s) available, financial stability of the community, quality of care, and experience of the management team.

NIC Housing Classifications Definitions of the different senior housing options as determined by the National Investment Center (NIC) and the American Seniors Housing Association (ASHA).

How Do I Know if a Continuing Care Retirement Community is Right for Me?

Here are a few important questions to consider determining if a CCRC is right for you:

  • Do you like to plan ahead; to control, reduce or eliminate the uncertainty about future housing and healthcare costs?
  • If you should ever require assisted living or nursing care, do you want assurance that such services may be accessed within the same community in which you live?
  • Do you lack family nearby that might provide a support system in the event that you require care in the future?
  • Do you seek to lessen the burden on your adult children if you should ever require assisted living or nursing care services?
  • Are you in a position financially to possibly pay an entry fee and monthly service fees? (Some CCRCs provide subsidized housing options via HUD financing alternatives.)
  • Do you seek to avoid social isolation in your later years of retirement?

If you answered yes to most of these questions then a continuing care retirement community may be an appropriate choice for you.

How Do I Choose a Continuing Care Retirement Community?

Choosing a CCRC is a big decision and one that is probably unique from other decisions you have made. It is a lifestyle, financial, housing, and healthcare decision all wrapped up into one. Making an informed decision can help secure your future regardless of unforeseen health situations.

Here are a few important aspects to consider:

  • There are five main types of contracts offered by CCRCs. You should have an understanding of each type and which is most suitable for your unique situation.
  • Many CCRCs require an entry fee. Entry fee contracts will either be standard, “declining-balance” contracts or “return of capital” contracts.
  • Under a standard contract you will not recoup any of your entry fee if you decide to leave the community- or in the event of death- if the occurrence takes place after more than a just few years from the time you take occupancy within the community. During the first few years you would like receive back some portion of the entry fee.
  • “Return of capital” contracts guarantee that you (or your heirs) will always receive back some portion of your entry, not matter the length of time. All other things being equal a return of capital contract will generally require a higher entry fee than a standard, declining-balance contract. Be sure you understand the specific stipulations for receiving a refund. For instance, does your unit have to be re-sold or re-occupied before the refund will be paid? Click here to learn more about return of capital contracts.
  • Take time to understand the financial viability of the CCRC. Financial stability of the community is important in order to ensure that it will be able to provide on an ongoing basis the quality of care and services that you expect and have paid for. Consider consulting with an accountant or financial professional that is well versed in CCRC contracts and finances. A more detailed discussion about financial stability at CCRCs can be found here.
  • Although CCRCs offer many attractive services and amenities for those living independently, it’s important to remember that one of the primary reasons for considering a continuing care retirement community is access to health care. Be sure to inquire about the levels and quality of care provided.

What Else Should I Understand about Continuing Care Retirement Communities?

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