According to the federal government, 70% of people 65 and older will need long-term care services and support in their remaining years. There are many options, but if someone wants to age in a community that can address the various levels of care, consider looking into a continued care retirement community (CCRC), also known as a life plan community (LPC).

What is a continued care retirement community (CCRC)? 

A CCRC allows older adults to age in place during their stages of aging. CCRCs include a full continuum of care options allowing residents to live on the premises for the rest of their lives as their needs change. Unlike most of the other options, CCRCs include:

Independent Living: Residents can live independently in an apartment or studio.

Assisted Living: Residents reside in an apartment or studio, but a caregiver comes in to help them with their Activities of Daily Living (ADLs).

Nursing Homes, also known as Skilled Nursing Facilities (SNFs): Residents with more serious medical conditions receive 24-hour medical and non-medical care.

Short-Term Rehabilitation: Residents receive 24-hour medical and non-medical care while they recover from surgery, accident, or severe illness. Care is temporary, and once the resident recovers, they return to their prior living situation.

Memory Care: Residents with dementia or Alzheimer’s who need a higher level of care with trained staff who specialize in memory care.

Additional services?

• Housekeeping
• Dining options
• Transportation to medical appointments and shopping
• Wellness and fitness programs
• Recreational activities, including a wide range of social activities and outings for residents
• Common areas for residents to interact and socialize

Who would be interested in continued care retirement communities? 

• Anyone age 60 or above.
• Anyone wanting a community to handle all life’s needs.
• Couples with different needs but want to live on the same property. For example, a spouse qualifies for independent living while the other needs a higher level of care, such as Skilled Nursing or Memory Care.   

What are the pricing models?

Option 1 – Entrance fee framework: Residents pay a hefty fee upfront, ranging from $40,000 to over $2,000,000. The average initial payment is $402,000. Afterward, residents pay monthly maintenance or service fees. Upon contract termination, the facility may refund a portion of the entrance fee or amortizes it over a certain period, potentially leaving heirs with no refund. Other options allow residents to have a membership arrangement, a proprietary interest in their living unit, or a party to a master trust agreement.

Option 2 – Straight rental model: Residents pay no up-front fees but a monthly fee. The average monthly charge for both communities is $3,555, with an average annual rent increase of 2%.

The various contracts.

Community care retirement communities have various contracts that are notoriously complex, so run them by an attorney before signing. The top three arrangements are:

An extensive life-care contract, which is the most expensive, offers a full range of services, including unlimited assisted living, medical treatment, and skilled nursing costs for little or no additional charges.

The modified contract offers limited services, and anything beyond those services incurs a higher monthly fee.

Fee-for-service contract has the lowest enrollment fees, but residents pay for specific services needed, such as assisted living, skilled nursing, or memory care.

Who pays for this? 

Health insurance does not cover the costs of continued care in retirement communities. Therefore, these costs are out-of-pocket unless you have a long-term care policy to help pay. Talk to a financial advisor or life insurance broker regarding potential policies.

STAGES is here to let you know your living options after retirement.