A continuing care retirement community (CCRC) is a senior living campus that offers several levels of care in one place, typically independent living, assisted living, memory care and skilled nursing. Residents usually move into an independent apartment or cottage and can shift to more care on the same campus as their health changes, under a contract that can last the rest of their life1.
Many CCRCs now call themselves life plan communities. The appeal is security: you choose your future care setting while you are well, and you avoid another move in a crisis. The tradeoff is a complex, often expensive contract. This guide explains how CCRCs work, the main contract types, the risks federal auditors have flagged, and how to decide whether one fits.
What is a continuing care retirement community?
Continuing care means the community promises housing plus access to a range of care services over time, usually under a single long-term agreement. Most CCRCs include12:
- Independent living. Apartments or cottages with dining, housekeeping, activities and transportation. See assisted living vs. independent living for how this level differs.
- Assisted living. Help with bathing, dressing, medications and other daily tasks.
- Memory care. A secured setting for residents living with dementia, in many but not all CCRCs.
- Skilled nursing. Licensed nursing home care for short rehab stays or long-term care.
Residents generally move between levels based on assessments by the community's staff, and couples can often live on the same campus even when one spouse needs more care than the other. That is one of the strongest reasons couples choose a CCRC; our guide to assisted living for couples covers the alternatives.
CCRC contract types
The contract determines how much you pay now and how much you pay later if you need more care. The industry commonly groups CCRC contracts into these types1:
| Contract | How it works | Who it may suit |
|---|---|---|
| Type A: life care (extensive) | Highest upfront and monthly charges; future assisted living and nursing care provided with little or no increase in monthly charges | People who want predictable costs and to transfer long-term care risk |
| Type B: modified | Lower upfront and monthly charges; a set amount of higher care included or discounted, then market rates | People willing to share some risk |
| Type C: pay-as-you-go | Lowest upfront charges; higher levels of care billed at market rates when used | People with long-term care insurance or substantial savings |
| Rental | No large entry payment; monthly rent, with care billed separately | People who want flexibility or cannot tie up assets |
| Equity or co-op | Residents buy a unit or membership; care services billed separately | People who want ownership |
Names and terms vary by community and state. Always read the actual contract.
Upfront entry payments and refunds
Most contract-based CCRCs charge a one-time entry amount when you move in, plus monthly charges that cover housing, services and, depending on the contract, some future care. Communities often offer several refund options: a declining-balance plan with no refund after a few years, or a partially refundable plan with a higher entry amount. Refunds may depend on your unit being resold1.
The risks to understand before you sign
A federal Government Accountability Office review found that CCRCs can offer real benefits but carry risks residents may not expect1:
- Financial failure. If a CCRC runs into financial trouble, residents may lose part of their entry payment or face higher charges. Protections vary by state.
- Refunds that are hard to collect. Refundable contracts may only pay out after your unit is reoccupied.
- Contracts that are hard to compare. Terms on care levels, transfers and refunds differ so much that side-by-side comparison takes real effort.
- Who decides on moves. Staff, not residents, usually decide when someone must move to a higher level of care.
- Uneven state oversight. Some states regulate CCRCs closely, often through the insurance department, while others do little.
Ask for the community's audited financial statements, occupancy rates, debt and reserves, and have an accountant or attorney look at them. Ask which state agency regulates the CCRC and whether it must file disclosure statements. Voluntary accreditation, such as CARF's continuing care accreditation, is another signal worth asking about3.
Who can move into a CCRC
Most contract-based CCRCs require new residents to enter independent living. Expect a health review, sometimes including medical records, and a financial review to show you can afford the charges for the long term. Many have minimum ages, usually in the 60s. People who already need assisted living or nursing care may be able to move in directly in some communities, but usually without the full contract benefits. Popular communities may also have waiting lists of a year or more for independent living units, so it helps to start looking early.
Because of these rules, the decision window is earlier than for other senior living. If you wait until health declines, a CCRC may no longer be an option, and an assisted living or nursing home search becomes the path instead.
How people pay for a CCRC
Most residents pay for CCRCs with savings, investments and the proceeds of selling a home. Other sources can help with parts of the cost:
- Long-term care insurance. Policies can help with assisted living or nursing care, especially under pay-as-you-go contracts. See long-term care insurance.
- Medicare. Medicare may cover short-term skilled nursing and rehab after a qualifying hospital stay, but not long-term custodial care or independent living45.
- Medicaid. Some CCRC nursing units accept Medicaid. Federal law counts a CCRC entry payment as an available resource in some situations, such as when it can be used for care or is refundable6. Read about the Medicaid look-back period before transferring assets.
- Tax deductions. The IRS allows part of certain lifetime care payments to count as a medical expense when the community can show the share attributable to medical care7. Ask the community for its annual statement.
Is a CCRC right for you or your parent?
A CCRC tends to fit best when several of these are true:
- You are healthy now and planning ahead. The model rewards moving in early, while you can enjoy independent living and qualify for the contract.
- You want to stay in one place. If avoiding another move later matters a lot, having every level of care on one campus is the main benefit.
- You are part of a couple. Spouses with different care needs can stay close, often a short walk apart.
- You can commit assets for the long term. Entry payments tie up money that will not be easy to get back, and refunds may take time.
- You value predictability. Life care contracts trade higher costs now for more stable costs later.
A CCRC may be a poor fit if you are unsure where you want to live in the long run, want to leave money in an estate, need care now, or would struggle if monthly charges rose faster than your income. Some families also find that the best local assisted living or memory care is not part of a CCRC at all.
Adult children helping a parent decide should talk honestly about the money. A CCRC can protect a parent from future care costs, but it can also use up savings that might otherwise pay for care elsewhere. An independent financial planner who does not sell products or an elder law attorney can model both paths.
CCRC vs. assisted living and other options
| CCRC | Independent living | Assisted living | |
|---|---|---|---|
| Care levels on site | Independent through skilled nursing | Usually none; outside home care | Personal care and medication help |
| Typical entry | While healthy | While healthy | When daily help is needed |
| Upfront payment | Often large, under a contract | Usually none; monthly rent | Usually small move-in charge |
| Future moves | Usually on the same campus | Move out if care needs grow | May need to move for nursing care |
| Long-term commitment | High | Low | Low to moderate |
If you mainly want community and services now and are not ready to commit assets, independent living with a plan to move later may fit better. If you or your parent already needs daily help, compare levels of care in assisted living instead.
Questions to ask a CCRC
- Which contract types do you offer, and what exactly does each include?
- What is the refund policy, and when are refunds paid?
- How much have monthly charges risen each year over the past decade?
- Who decides when a resident moves to assisted living, memory care or nursing, and can we appeal?
- Is there a waiting list for assisted living, memory care or nursing beds, and what happens if they are full?
- What are your occupancy rate, debt levels and reserves? May we see audited financials?
- Which state agency regulates you, and can we see your disclosure statement?
- Do your nursing and memory care units accept Medicare and Medicaid?
- What happens if I run out of money through no fault of my own?
- Can I see recent state inspection reports for the assisted living and nursing units?
Visit at least twice, eat in the dining room, and talk with residents at different levels of care. Our senior living tour guide has a checklist you can adapt. Have an elder law attorney review the contract before you sign.
