If you read the first blog in our CCRC series, you know there’s no single “senior living” path waiting in retirement. Your journey in later years might look very different from someone else’s depending on how you choose to manage the uncertainties of aging. Aging at home and moving to a CCRC represent two ends of the spectrum—handling everything yourself vs. having everything (in one way, shape, or form) taken care of for you. But that doesn’t mean choosing the CCRC route represents the end of your decision-making. All CCRCs are different in terms of their culture, health care options, and ways to finance care.
In other words, if you’ve seen one CCRC you haven’t seen ’em all—you’ve just seen one!
In this post, we’ll explore the differences across CCRCs and how you can begin your evaluation process to find the right fit.
Are you in your late sixties or early seventies? It’s the perfect time to get on CCRC waitlists! Let’s talk about your retirement vision and how to evaluate CCRC affordability.
Which Community fits your personality?
This is arguably one of the most important considerations, because if you are considering a community, you will want it to be one where you feel comfortable, you enjoy the culture, the amenities, and of course, the food! Before comparing contracts and costs, make sure the community itself feels like a place you could genuinely enjoy calling home.
Every CCRC has its own personality, from the setting and residences to the social atmosphere, amenities, and day-to-day pace of life. The financial details matter, of course, but peace of mind also comes from knowing you’ve chosen an environment where you can feel comfortable, connected, and happy.
Visit several communities in the geographical area(s) you’re considering, and give yourself enough time in each to get a sense of what daily life there might really feel like. (Many CCRCs welcome you to stay overnight.) Specifically, pay close attention to:
- How people interact with one another (including staff and residents), how welcoming they are toward newcomers, and whether people seem genuinely happy and engaged
- The activity level at all times of day, including the evening; is it a good match for your own lifestyle?
- The flexibility (or lack thereof) in schedules
- The range of activities and amenities, and whether they fit your likes and needs
- The quality, options, and taste of the food. Food has become a major focus in many CCRCs, with many offering a variety of dining options—including gourmet chefs! Try a meal or two while you’re there.
Once you’ve come up with a shortlist of preferred communities, it’s time to dig into their contracts.
2 Core Types Of CCRCs (Plus More Options!)
Because at the heart of a CCRC is a contract that provides you access to a continuum of care, choosing the right CCRC contract is critical. This means finding a community whose contractual care offerings and associated financial structure align with your needs and long-term plan. While each CCRC may look similar on the surface, the contract type can change how you pay for future care, how much financial risk you carry, and how much flexibility you retain over time.
Fundamentally, there are two core types of contracts (note that an increasing number of communities are offering multiple contract types):
- Type C, “ Fee-for-service” contract. If you move from independent living to assisted living to skilled nursing, you will pay a fee for service for any additional care that’s provided by the community.
- Type A, “life care” contract. This contract type has an element of cost sharing. If you need to move from independent living to assisted living to skilled nursing, your monthly fee at the community won’t change. While this does provide some degree of risk management with regard to high care costs later in life, these communities tend to be a little bit more expensive.
Increasingly, some communities are starting to offer a Type B, “fee-for-service with a discount” contract, which is a hybrid. You pre-pay for some amount of care and receive discounts in various forms, for example, possibly in the form of limited cost-free visits to the healthcare center.
Other less common contract types include the Equity and Co-op models. The Equity model is usually fee for service, and the key difference here is that in these communities residents with this model purchase and own their individual living unit (rather than paying an entrance fee), which means you or your estate can resell it in the future. In the Rental model, you pay higher monthly fees but no entry fee (possibly a nominal community fee); your access to healthcare may not be guaranteed in this model.
Any one of those contract types can be the right fit for you, but in order to make a decision with confidence, you need to do some legwork to understand the financial aspects of the decision. Can you afford it upfront? Can you afford it for the next two or three decades? If costs go up after you enter the community and you’re paying an out-of-pocket fee for care, what does that look like? And would hefty care costs jeopardize the financial security of your spouse, who might survive you?
To do this legwork fully, gather and read the relevant paperwork: community contract, any disclosures, a tax letter (more on this in Part 3 of the blog series), a summary of fees, etc. Be sure to get these documents from the community itself rather than a friend, an ad, or a third-party website, any of which may not be fully accurate, current, or applicable to your personal situation.
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Planning Tip: It can be very helpful to talk through these questions with a financial advisor at this stage. An advisor can look at your financial situation objectively and determine a community’s affordability. They can also help you do the planning work, if necessary, to optimize your financial resources so they last as long as possible. |
At this point, it’s advisable to get on the waitlist for the communities in which you have moderate interest. Often, waiting lists are multiple years—especially for highly rated communities and the most sought-after independent living units. Waitlist fees vary as do their refund policies, so be sure to learn how each community’s waiting list works and whether declining an available unit affects your position.
Next Up: Is a CCRC financially sustainable for you?
In the final part of our CCRC series, we’ll look at how to assess whether a CCRC is within reach financially for you, along with some common myths that surround affordability.
In the meantime, if you’d like more personalized guidance around CCRC contracts and financing, please don’t hesitate to get in touch with us at Curio Wealth!
We’ve helped dozens of people navigate CCRC decisions, including clients who already have an advisor but need specialized planning support for this very specific transition. Whether you’re looking for a long-term planning partner or focused guidance for this important decision, our goal is the same: to help you evaluate your options and make a decision that supports the life you hope to lead in the years ahead.
