Paying for a Continuing Care Retirement Community (CCRC)

The continuing care retirement community may be difficult to understand. Many people know that residing in a CCRC will offer the resident access to many levels of care on one campus but understanding how to pay for a CCRC can be confusing.

To help clear the muddy waters, I have listed below some frequently asked questions along with the answers.

Q: How do the rates differ from other kinds of senior living options, such as assisted living apartment homes?
A: Most CCRC’s require a buy-in fee. This can be a percentage of your assets or a flat fee. There are various plans that regulate whether or not your monthly rate increases as you increase services, but it is often less than a stand-alone assisted living or nursing facility because you have paid the upfront fee.

Q: What does a CCRC buy-in fee cover?
A: Paying this fee locks in your ability to transition to higher levels of care down the road. In addition, the CCRC will tell you that once your funds are exhausted you can continue to reside at their community. Please note that the ability to is continue your residency is due to first being approved for elderly waiver where the state reimburses the community a small portion of your monthly fees AND the community places a portion of your buy-in fee into an endowment to offset what that program or you can’t pay down the road.

Q: What happens to that money if you leave a community or pass away?
A: Typically, a percentage of your buy-in fee can be refunded. The amount refunded is often based on the length of time you resided at the community.

Q: What about CCRC’s that don’t charge a buy-in fee and instead charge a community fee?
A: CCRC’s that do not charge a buy-in fee will charge a smaller community or lifestyle fee. This fee often ranges from $2500-$5000. This offsets maintenance and upkeep costs for the life of your residency. Since they do not charge a buy-in fee, you will be assessed a monthly rental fee and offered service levels for care. The total monthly fee may be larger than a CCRC that charges the buy-in. The difference is the community doesn’t get your money upfront, it’s instead spread out over time. In addition, because they did not request the large buy-in upfront, they do not have your money to place in an endowment for when you run out down the road. This means you would likely have to move if you outlive your finances.

A CCRC can offer peace of mind that as your healthcare needs change the help will be there and you won’t have to move to another community. However, be aware that although all CCRC’s offer many levels of care, they often require the resident to move to another building that is licensed to provide the higher level of care. If continuing to reside in the same building is a concern for you, look in to a CCRC that has all levels of care connected under one roof. They are rare but can be found.

So, whether you choose a continuum care retirement community that charges a buy-in fee or not will depend on whether you want to manage how your money lasts or have the community do it for you. It’s a personal preference.

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