Continuing care retirement communities (CCRCs), often known as Life Plan Communities, have some serious selling points: They offer a low-maintenance, resort-like lifestyle thanks to a host of services and amenities that come standard for residents. They also take a comprehensive approach to senior living, offering some combination of independent living, assisted living, skilled nursing, and memory care all on a single campus.
In these types of communities, residents pay an entrance fee and monthly fee as part of their investment. Residents also select a return option when they move into a CCRC, which returns a percentage of their entrance fee to a beneficiary when their contract ends.
Compare CCRC finances by contract type
Inclusive (Type A) CCRCs
Inclusive (Type A) Continuing Care Retirement Communities come with the highest upfront cost because they ensure seamless access to higher levels of care on the same campus with little to no increase in monthly fees.
Their higher entrance fee is an investment in financial predictability that comes with built-in access to future care.
Modified (Type B) CCRCs
Continuing Care Retirement Communities with Modified (Type B) contracts offer a limited amount of care (or number of care days) before charging market rates for services, and your upfront costs are typically lower than Type A.
Once those care days have been used, residents will pay a market rate for any additional care they need. The costs of care can fluctuate for many reasons, from caregiver wages to the cost of medical supplies, medications and more.
Fee-for-Service (Type C) CCRCs
Fee-for-Service (Type C) CCRCs come with the lowest entrance fee of the three contract types. Why? Because care is not included in the contract.
The trade-off for this lower entrance fee: Fee-for-Service communities offer less predictability around costs. Residents pay market rates for higher levels of care, with no amount of care built into their entrance fee or monthly fee for independent living.
Are CCRCs compatible with long-term care insurance?
Many seniors ask us whether they can use the benefits from their long-term care insurance to save money on or cover their care costs in a Continuing Care Retirement Community.
Good news: Long-term care insurance benefits can dovetail nicely with the services offered in Life Plan Communities. But these policies are tailored to individuals — so contact us to discuss your personal circumstances.
Let’s take a look at how the costs of the three types of CCRC contracts compare to the costs of other options you may be considering.
Costs of aging in place at home
Remaining at home is a viable option for many seniors who are enjoying their current lifestyle. But is it the most affordable option for now and for your future?
Aging in place lets you enjoy all the comforts and benefits of living at home. But you’re also responsible for the individual costs associated with those comforts.
- Property taxes, association fees and special assessments
- Monthly utilities, including cable and internet
- Landscaping and housekeeping services
- Gym and country club memberships
- Security systems
- Home modifications for accessibility
- Future care services, should you need them
Then, consider this: 40% of the 137 million homes in the United States now are more than 50 years old — and newer-construction homes generally haven’t been built for aging in place safely and comfortably.
Have you considered what modifications may need to be made to your existing home as you age? According to the American Seniors Housing Association, it could cost tens of thousands of dollars to modify your existing home for your changing accessibility needs, from slip-resistant bathroom renovations to wider doors, stair glides, and smart home technology.
And because time is money, consider, too, the time and effort it takes to coordinate renovations on this scale.
Then there’s home care. According to the Genworth Cost of Care Survey 2021, the national median rate for home health aides is $27 per hour, a $5/hour increase from Genworth’s 2018 study.
If you require only sporadic care, there’s a good chance you’ll save some money in the short term by aging in place.
If you need around-the-clock care, average monthly costs are up to nearly $20,000.
Rental senior living costs
Similar to CCRCs, rental senior living properties offer an independent lifestyle with plenty of opportunities to make new friends and enjoy low-maintenance living.
In these communities, residents simply sign a lease, pay their security deposit and move in. There, you’ll typically pay a one-time “community fee,” followed by a single monthly fee that covers many aspects of your life there: meals, utilities, security and more.
They have a low entry cost compared to CCRCs, for one major reason: Rental communities don’t provide guaranteed access to future care.
Rental communities can be a great option for your life now — but they don’t take into account the care you may need later, or the costs that come with it. These communities may have referral relationships with standalone assisted living, memory support and skilled-nursing facilities. but they usually don’t provide care services themselves.
If you need those services, you may have to hire outside caregivers to come to you, or you may have to move to another facility entirely.
Either way, you’ll pay the current market rate for those services.
Standalone care facility costs
Assisted living, memory support, and skilled nursing are alternative residential options for those who need more hands-on care after aging in place at home or living in a rental community.
The costs can vary by location — just as home prices do — as well as how much care you need.
In general, the monthly fee for these options accounts for the cost of community living, plus the cost of ongoing medical care, ranging from supervision and assistance with daily activities in an assisted-living facility to rehab or longer-term nursing care at a skilled-nursing facility.
The median assisted living cost is $4,500 per month, and that number increases to up to $10,000 when you include skilled nursing or memory support services, according to the Genworth Cost of Long-Term Care survey.
As you can see, there are so many factors involved in the cost of senior living that it can be challenging to make an apples-to-apples comparison.
Plus, every senior’s financial picture is unique.
As you start weighing your current wants and needs, there’s the future to think about too.
Life Plan Communities can offer financial predictability for the years ahead — and your investment can also be considered part of your estate plan depending on your wishes.
Glad to be connected!
There’s a lot to consider when embarking on the next phase of retirement—and contacting us is a big step. (Well done!)
We’ll be in touch soon to share expert insights, and one of our team members will also be reaching out to answer any questions you may have.