There's no question that compared to the costs for other types of senior living options, the continuing care retirement community costs are far more numerous and expensive. The good news: while upfront continuing care costs are pricey, you may actually save a significant amount of money in the long run.
Other senior living options are limited in the scope of services they provide, but with continuing care retirement communities (also called CCRCs) you will be paying into a system that guarantees you lifetime access to the housing, support and care you need, on your terms, and even if your health needs change. In addition, prepaying for health care may actually qualify you for significant tax breaks that can help offset continuing care costs significantly.
Continuing care costs are structured differently from place to place, but in general, these are the most common costs that you can plan for, and what they cover:
Incoming residents pay a one-time, upfront entrance fee upon moving into continuing care. The entrance fee may or may not be fully or partially refundable. Because the entrance fee usually covers your health care costs, it is usually the most significant cost unless there is a buy-in fee.
Depending on the community you choose, continuing care costs may include a buy-in fee, which is sometimes referred to as an "ownership fee." Buy-ins are a relatively new option offered mostly at newer CCRCs. Because they involve the purchase of real estate (i.e., you would own your unit), buy-in fees are generally much more expensive than entrance fees.
In a buy-in scenario, you would pay for services and health care separately. As an owner, you would be able to sell, will or deed your unit as you would any other type of property, with respect to the CCRC's established rules. This can be tricky, as a buyer would likely have to meet the community's eligibility requirements.
Monthly fees cover continuing care costs like housing and sometimes include health care services. Expect periodic fee increases that keep pace with inflation. Also expect an increase in monthly fees as you move between housing components or levels of care—from assisted living to skilled nursing—for example.
Some CCRCs offer a pay-as-you-go option in which you would pay only monthly fees. This is essentially a month-to-month rental option, and has the potential to be very expensive if you require health care (for which you have not prepaid with an entrance fee) down the road.
Avoid hidden continuing care costs by finding out which services will be available to you and at what cost. Start by asking about the things that are not included in your contract.
These could include health care, personal assistance with daily living activities, meal plans, housekeeping and beautician services, transportation and more. Identify all services which may incur additional fees before signing your contract. How much will they cost?
Miscellaneous continuing care costs that you may also want to plan for include fees for:
- A waiting list (if one exists)
- Late charges (for monthly fees)
- Pet deposit
- Phone and utilities
- TV and Internet
- Wellness programs
By planning ahead for known costs and anticipating hidden fees, you can control your overall continuing care costs and write them off (along with your tax deductions) as a wise investment in your health and future.
Find Continuing Care Retirement Communities
While CCRCs often require a large, upfront financial committment, this cost is typically offset due to inflation and increased consumption of services over time. Browse our comprehensive directory to Find Continuing Care near you.
Written by senior housing writer Nikki Jong.