Is a continuing care retirement community (CCRC) worth it?

A continuing care retirement community (CCRC, also called a Life Plan Community) is a campus that offers independent living, assisted living, memory care, and skilled nursing in one place. The pitch: move in once, never move again, pay a predictable rate as your needs change.

The fine print is more complicated.

The structure:

• An entrance fee, typically $200,000·$1,000,000+ depending on contract type and unit size. Some are 90% refundable to your estate; some are non-refundable; many are partially refundable on a declining schedule.
• A monthly fee, typically $3,500·$8,000+, that covers meals, services, and (in some contracts) future care
• Three contract types:
  • Type A (Life Care) · highest entrance fee; monthly fee stays roughly the same as care needs increase. You're insuring against high care costs later.
  • Type B (Modified) · middle entrance fee; some discounted future care, then market rate.
  • Type C (Fee-for-Service) · lower entrance fee; you pay market rate for any care needed.

When a CCRC makes sense:

• You're in your late 60s or early 70s and healthy enough that you'll get years of independent living before needing care
• You can fund the entrance fee without straining liquidity or eliminating your inheritance plans
• You want to make the move once, on your own terms, while you can still adapt to a new community
• The Type A or Type B contract math works out in your favor · meaning you'd likely use enough future care to come out ahead

When a CCRC doesn't make sense:

• You're already 80+ and the entrance fee buys fewer years of upside
• You'd be straining liquidity to write the check · entrance fees should not require selling assets you'd otherwise keep
• You're moving primarily to "get it over with" · that's a sign you should look at standalone assisted living or staying put with help
• The CCRC is in financial trouble · many CCRCs have closed or restructured in the last 15 years, sometimes leaving residents with reduced refunds

What to check before signing:

• The CCRC's audited financial statements · look for healthy operating reserves and low debt-to-equity
• The actuarial study supporting Type A pricing
• State CCRC regulator status (regulation varies widely)
• The refund schedule in detail · when, how, and to whom
• What happens if the community converts a building or closes one level of care
• Resident satisfaction with the higher levels of care, not just independent living

A good CCRC contract handed to a good elder law attorney is two to four hours of legal review. Spend the time.