Understanding continuing care retirement community (CCRC) costs
Continuing care retirement community costs may include a large entrance fee, monthly fees, and added charges for services and amenities.
Fee-for-service, extensive, and modified contracts divide upfront and future health care costs differently.
Before signing a CCRC contract, review what it covers, request a complete fee schedule, and compare the costs with your available assets.
When you hear “aging in place,” you may picture modifying your home so you can continue living there as you age. But continuing care retirement communities (CCRCs), sometimes called life plan communities, offer another way for older adults to age in place. They provide different housing options and levels of care on a single campus, allowing you to remain within the same community as your needs change over time.
Why choose a continuing care retirement community?
CCRCs may appeal to independent older adults like yourself who want an active, community-based lifestyle while also preparing for future care needs. However, CCRC costs can be complex. The fee structure may include an entrance fee, monthly fees, amenity fees, and other expenses, making it difficult to add up the costs and determine whether a CCRC fits your budget.
CCRC costs and details
Here’s a closer look at CCRC costs, the available contract types, and ways you may be able to pay for living in a CCRC.
CCRC entrance fees
One of the largest CCRC costs is the upfront entry fee. This one-time entrance fee may be partially or fully refundable, depending on your contract. Entrance fees vary widely, ranging from $100,000 to $2 million. According to AARP, the average initial payment was just over $400,000 in 2021.1 The amount you pay upfront depends on the location and size of the unit you choose. It may also include a certain amount of money toward your future care.
According to LongTermCare.gov, your one-time entrance fee may not be refundable.2 However, some communities are willing to offer full or partial refunds under certain circumstances. For example, if you move or pass away within a specified period after moving in, your entrance fee may be partially or fully refundable. Keep in mind that the community may hold the refund until your unit or spot has been filled.
CCRC monthly fees
In addition to the entrance fee, you’ll pay monthly fees for as long as you live in a CCRC. These fees vary widely but usually range from $2,000 to $4,000 per month. You can think of these monthly payments as rent. The amount depends on the type of housing you choose, the contract you sign, and the amenities available within the community.
Monthly fees often rise over time with inflation. According to Kiplinger, monthly fees generally increase by 4% to 6% each year while you’re living in the independent living portion of a CCRC.3 You may see larger increases if you move to skilled nursing or an assisted living area within the community.
Other CCRC fees to consider
Even after paying an entrance fee and ongoing monthly fees, you may face added charges for services that aren’t included in your CCRC contract. Before choosing a CCRC, ask for a clear explanation of what is included, what isn’t included, and which services may cost more.
Additional charges may apply to transportation, meal plans, health care, housekeeping, help with activities of daily living, beautician services, and more. Identify which services cost extra, request a printed or emailed copy of the complete fee schedule, and consider how much those expenses could cost before signing a contract.
Other continuing care costs you may need to plan for include:
Pet deposits, if pets are permitted
Wellness programs
Maintenance fees
Late charges
Waiting list fees, if applicable
Internet and television
Utilities and phone
Parking fees
Storage
Different types of CCRC contracts
The type of contract you sign is one of the most significant factors affecting the overall cost of living in a continuing care retirement community. There are three basic types of CCRC contracts, each with different risks and benefits. The main difference among them is the trade-off between the entrance fee you pay upfront and the health care costs you may face in the future.
Fee-for-service contracts
This contract generally has the lowest upfront enrollment fee, but there’s a trade-off later. If you need assisted living or skilled nursing services within your CCRC, you’ll have to pay for those services at market rates. With this type of contract, your future expenses depend heavily on your health, wellness, and care needs.
Fee-for-service contracts may be relatively affordable at first, but they can become extremely expensive if you eventually need extensive amounts of health care.
According to AARP, these contracts have the lowest enrollment fees but carry the highest financial risk because you’ll pay market rates for future assisted living and skilled nursing care.4 With current and projected labor shortages in nursing and care, those costs are likely to rise.
Extensive contracts
Extensive contracts are the most expensive option, but they may also provide the greatest peace of mind for you and your family. Under a Life Care contract, your monthly maintenance fee remains stable regardless of the type of care you need in the future. If you need an in-home caregiver later, that care is covered under the contract.
If it becomes time to move into an assisted living area or skilled nursing setting, that care is also covered. You have unlimited access to the health care the CCRC provides for the same fee you paid when you first moved in.
A Life Care contract requires the largest upfront buy-in, sometimes reaching the high six figures. If you can afford it, this contract may be a good choice for couples who develop different medical needs at different times. It can also protect your family from rising future costs.
Modified contracts
With a modified contract, you receive specified services, mostly medical services, for a set amount of time. Once you reach that limit, you still have unlimited access to the services, but you must pay a higher monthly fee.
The higher fee is typically still quite a bit lower than what you might pay for the same services outside the CCRC. A modified contract may cover a specific number of health care days each month, such as 15 days of skilled nursing care or help with activities of daily living, including grooming, bathing, and dressing. After reaching the contract’s time limit, you must pay the additional fees yourself.
Before committing to a modified contract, review your health insurance policy so you understand any potential overlap with the services you’d be paying for.
Considering the cost of a life plan community
A large entrance fee and ongoing monthly costs may feel overwhelming, but there are several ways to pay for life in a CCRC. If this option fits your needs, you may be able to use proceeds from selling your home. You may also be able to use long-term care insurance if you eventually move to the assisted living level of care. In some cases, Medicare may pay for certain services you need while living in a CCRC.
To decide whether a CCRC is an affordable option for you, ask each community you’re considering for its audited financial statements. Then, work with your financial advisor to compare the total costs with your available assets. Understanding the contract, included services, possible future care expenses, and potential added fees can help you make a more informed and confident decision.
Planning for costs with the Cost of Care tool
Planning ahead can make decisions about your future care that much easier. Explore care costs and resources designed to help you prepare.
Written by
Arthur Bretschneider, MBA
Arthur Bretschneider is Chief Product Officer at CareScout. As a third generation leader in the senior living industry, Arthur brings both deep compassion and a wealth of practical experience to his work at Seniorly. Arthur holds an M...
