A Look at Continuing Care Retirement Communities

One of the big questions retirees struggle with is where to live in their later years. Should I stay in my house, or should I move to a retirement community? If I move, when and where should I go?

If you’re thinking about moving to a retirement community at some point, Continuing Care Retirement Communities (CCRCs) are an increasingly popular and unique housing option for senior living. Multiple levels of health care are offered in the same community. So as your needs change, your address doesn’t have to.

CCRCs can include some or all of the following levels of care: independent living, assisted living, skilled nursing and memory care. The allure of CCRCs is that you guarantee your housing and access to health care for the rest of your life at a pre-determined cost. You enter residing in independent living. But if you need long-term care down the road, you can transfer to the level of care you need on site, without the stress of looking for a new community. With CCRCs, you replace the unknown, unpredictable future cost of healthcare, with the predictability of regular fees that you can budget and plan for.

The allure of CCRCs is that you guarantee your housing and access to health care for the rest of your life at a pre-determined cost.

How much do CCRCs cost?

At Aspiriant, we have a lot of experience helping our affluent clients identify, evaluate and choose the best retirement community to meet their needs. All of the CCRCs we’ve looked at have similar fee structures. They typically charge a one-time entrance fee and a monthly fee. The entrance fee can range from $100,000 to $2 million, depending on location, services, amenities and level of luxury. Some communities offer either a partial or full refund to either you or your heirs. The monthly fee can range from $2,000 to $10,000 per month with an annual inflation adjustment.

These aren’t your parents’ retirement homes

When exploring retirement living options, clients are often skeptical when we start talking about senior homes. In our experience, many retirees have a negative association with them — maybe from experiences they have had with their parents or impressions from how they are portrayed in popular culture. However, retirement communities have come a long way. A number of clients who moved to a community before they thought they were ready later told us that they wish they had moved in even sooner.

They love not having to deal with day-to-day chores — like grocery shopping, cooking and home maintenance — and they actually have the free time to enjoy retirement. In addition to a continuum of care, the monthly fee can include any number of amenities, such as three meals per day, housekeeping, laundry service, transportation, and a host of educational, cultural, fitness and art programs. Some communities have luxurious, resort-style amenities like golf courses, spa and beauty services, and indoor saltwater pools.

Start planning early!

The main thing we stress to clients is the importance of planning ahead and starting early! With 10,000 baby boomers turning 65 each day, CCRCs are in demand, and it can take years to get off the waiting list. We’ve seen up to five years for the most popular communities.

We usually recommend you start researching retirement communities in the middle of your retirement years. Wait list applications usually require an initial financial and health screening, as well as a deposit. More rigorous screenings are required before you actually move in. Most CCRCs will not accept a prospective resident if they are not healthy enough to enter living independently. If you wait until you need long-term care to apply, there’s a risk you won’t be accepted, or your acceptance will be conditional. In most cases, if you’re on a wait list and your name comes up, but you’re not ready to make the move, you can decide to defer and remain on the list.

Thinking about this early, when you’re healthy and active, is better than getting a late start and either having a reduced number of options or leaving this important decision completely to your loved ones.

How to begin shopping for a retirement community

• Brainstorm locations of where you want to live and make a list of “needs” and “wants.”
• Call the facilities in your target areas and ask for a brochure and pricing information. Find out if there is a wait list, what’s the average wait, and how to get on it.
• Schedule a visit at each facility and bring family or friends with you. Prepare a list of questions ahead of time. We recommend an initial visit to tour the facility with a representative, meet residents, and have a meal in the dining room. Before making any final decisions, we suggest a weekend or weeklong stay, if permitted, to be sure the culture and lifestyle fits you.
• Do your due diligence. You want to make sure the facility will be there when you need it. An advisor can help you review the financials of the owner or operator (cash, debt, profitability). Before signing any long-term contract, have an attorney review it.
• If you like one or more communities, apply to get on the wait list (if applicable).

Questions to ask CCRC managers

• What are the monthly fees? How often do they go up? Is there a cap? What has been the highest increase? What’s the average?
• Is there financial help for residents who run out of assets to pay the monthly fee?
• Is the community accredited by CARF International? (meets rigorous standards set by this independent, nonprofit accreditor)
• What are the staffing ratios and qualifications? If needed, are there bilingual staff?
• If a resident requires a higher level of care, who’s involved in this decision? If one spouse needs to move to another level of care, can the other spouse stay in independent living? What if there isn’t room at the care facility when needed?
• Have there been any prior or current lawsuits, regulatory violations and tenant complaints? Request copies of licensing and inspection reports.

CCRCs are a great senior living option. They eliminate the stress for you and your family of wondering where and how well you’re going to be taken care of as your needs change, and they bring some predictability to the rising costs of health care.

Selecting the right community for you is not a quick process. However, by starting early and enlisting the guidance of loved ones and a financial advisor, it will be easier to move in when you’re ready and enjoy a relaxing retirement.