Retirement: Retirement Communities That See You Through the Ages

By Patricia Mertz Esswein and Eileen Ambrose, Kiplinger's Personal Finance | March 2nd, 2018

If you like one-stop shopping as a consumer, you might also like a continuing care retirement community (CCRC) as a retiree.

These facilities promise to see their older residents all the way through independent living to skilled nursing care, should they ever need it. Convenience comes at a price, though. A residence at a CCRC can cost well into the six figures – or higher – so it won’t fit every budget.

There are nearly 2,000 CCRCs nationwide, many with waiting lists. To buy into one, you usually must be at least 62 and healthy enough to live independently. You live in a house or apartment and go to a community dining room for as many meals as you choose. The CCRC provides entertainment, fitness centers and wellness programs, plus excursions to museums, theaters and stores. If your health declines, you can move on to assisted living, memory care or skilled nursing until the end of your life.

“Living here is so easy, like being on a cruise ship,” says Ralph Davison, 71, who moved with his wife two years ago to Well Spring, a CCRC in Greensboro, N.C.

The majority of CCRCs require a hefty entrance fee, which averages about $320,000, up 3 percent from 2016, according to the National Investment Center for Seniors Housing and Care, an industry research group. The fee – based on the location, size of the residence, and whether it is single or double occupancy – can range from less than $100,000 to more than $1 million.

You’ll also pay monthly fees, which average $3,266 nationwide, up 4.8 percent from a year ago. These, too, vary widely, from about $2,000 to more than $7,000 at some high-end CCRCs. A CCRC pools the fees to run the community and provide for its residents’ long-term care.

In general, the higher the entrance fee and monthly fees, the more of your health care costs your fees cover. Many communities offer a partial – or even full – refund of the entrance fee if you leave or after you die. Contracts and terms also tend to be complex and vary widely from community to community.

“This is a very complicated decision,” says Andrew Crowell, vice chairman of D.A. Davidson & Co. Individual Investor Group, in Los Angeles. “Think about purchasing a home. Think about purchasing an insurance contract. And think about making one of the biggest financial and lifestyle decisions in your life. The decision to go into a continuing care retirement community is all three of those bundled into one.”

Patricia Mertz Esswein is an associate editor and Eileen Ambrose is a senior editor at Kiplinger’s Personal Finance magazine. Send your questions and comments to moneypower@kiplinger.com. And for more on this and similar money topics, visit Kiplinger.com.