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Key Facts About Life-Plan Communities

These developments, also called Continuing Care Retirement Communities, or CCRCs, offer a continuum of care, but be sure to look into these basic elements before signing a contract

By Richard Eisenberg

Continuing care retirement communities, or CCRCs, can be an appealing place to live in retirement because they promise to accommodate your changing health care needs as you age.

But before moving into one of these life-plan communities, you'll want to understand the financial side of that decision.

older adults playing cards at a table. Next Avenue, CCRC
Some life-plan communities offer "benevolent care," which helps pay for CCRC costs when a resident is facing a financial hardship.  |  Credit: Getty

"A continuing care retirement community has things like a senior center, activities, a gymnasium or a pool, a hair salon and a place for your car or a shuttle into town," said "Friends Talk Money" co-host Terry Savage on the recent episode of the podcast. (Full disclosure: I am also a co-host of that podcast, along with Pam Krueger.)

Continuum of Care

You might start in an independent-living home at a CCRC. "The continuing care part says that if you or your spouse [eventually need] assisted living or memory care or skilled nursing, you've already set up that plan in advance," Savage added. "And it some cases, it won't cost you anything more."

Moving into a continuing-care retirement community means signing one of four types of contracts, depending on how the CRC is set up.

If one day your spouse requires assisted living or skilled nursing care, but you don't, your husband or wife can move into that part of the CCRC while you stay in your independent living home there.

There are roughly 1,900 CCRCs nationwide, some for-profit and some not-for profit. The price for the peace of mind of living in one can vary tremendously.

Although the average initial CCRC payment is about $430,700, according to the National Investment Center for Seniors Housing and Care (NIC), initial payments can range from roughly $106,000 to $984,000. In addition to that one-time levy, the median monthly charge is $4,598 and subject to rise with inflation.

These steep fees are why most people move into CCRCs only after selling their homes.

The Alphabet of CCRC Contracts

Moving into a continuing-care retirement community means signing one of four types of contracts, depending on how the CRC is set up.

A Type A contract is a "full-service contract," said Dana Smith, chief revenue officer for Lifespace Communities, a Dallas-based not-for-profit that runs 18 developments. "It gives you, as a resident, the most reliable picture of your future expenses, even if your needs change." If, say, you eventually require help with activities of daily living, they are provided at little or no additional cost.

A Type B contract, also known as a modified life-care contract, combines elements of a Type A and a Type C contract (it's a fee-for-service one, with lower fees than Type A, not including health services).

Think of Type B as a Type A contract at a discount, and Type C as "essentially you bear your own burden for your future health care costs," said Smith.

She noted that a Type C contract is often appealing for people with good long-term care policies that cover some of the cost of that care.

A fourth option, a Type D contract is a rental agreement, which might not require an entrance fee.


Many CCRCs will refund some or all of your entrance fee to your estate or your family if you move out or die. Ask the CCRC management about its refund rules when deciding whether to live there.

Some life-plan communities offer "benevolent care," which helps pay for CCRC costs when a resident is facing a financial hardship.

Reviewing the Financials

It's also important to review a CCRC's statement of financial position or balance sheet, its statement of operations and its cash-flow statement, so you know how strong the community is financially.

Each nonprofit CCRC is required to file an annual report, called a Form 990, with the Internal Revenue Service. You can find these statements, which detail their finances, on the site.

You may want to hire an elder-care attorney to review a CCRC contract and financial documents to help you make an informed decision about living in the community.

For More Information about CCRCs

Check out Kiplinger's article, "Is a CCRC Right for You?"; CARF International's Consumer Guide to Life Plan Communities; and the Continuing Care Residents Association's consumer guides.

Photograph of Richard Eisenberg
Richard Eisenberg is the former Senior Web Editor of the Money & Security and Work & Purpose channels of Next Avenue and former Managing Editor for the site. He is the author of "How to Avoid a Mid-Life Financial Crisis" and has been a personal finance editor at Money, Yahoo, Good Housekeeping, and CBS MoneyWatch. Read More
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