Sensible Perspectives

Continuing Care Retirement Communities: Growing Old—In Style (Part 1 of 8)

Posted by on April 11, 2018

This is the first in a series of 8 articles on Continuing Care Retirement Communities. We included links to the other articles at the end of this one.

Ever since I hit {age redacted} I’ve had more thoughts about my future and about aging in general. Remember being 18 and thinking 30 was so old? Ah, memories. The fact is, 60 IS the new 40 and people are living longer, more vigorous lives long after they retire. The combination of this extended vitality and the financial independence that goes with a lifetime of earning and saving means more people are looking for a different sort of retirement. They want to retain their independence, while eschewing the menial everyday tasks that come with maintaining a private home. They want their own living space but don’t want to waste time mowing the lawn or shoveling snow. They want to spend their time golfing, traveling, and exploring the hobbies they had little time for while they were working.

Many retired people choose a senior living subdivision, but some require or will require long-term care. The type and degree of care can vary from person to person and will change as individuals age. As hard as this can be to contemplate, it’s realistic to plan for this eventuality. Dealing with these issues can create a tremendous burden on family members and cost a great deal. According to the 2017 Genworth Cost of Care survey, the median annual cost for skilled nursing care in Massachusetts (my home state) is $140,000, and an assisted living facility costs $67,000.1

There are numerous alternatives for senior housing available today, with more likely to emerge in the future as the U.S. population ages.2 One popular option is the Continuing Care Retirement Community, or CCRC. A CCRC, sometimes known as a life-care community, is a type of retirement community for people over the age of 62, in the United States, designed to meet a continuum of aging care needs—independent living, assisted living, and skilled nursing—generally on the same campus.3

How a CCRC works (in 320 words or less)

The idea is that you move into the community while you are still independent and of sound mind. If you ever need assistance with activities of daily living, the community will provide it. Although you might have to move to a different living space within the community to receive that care, you probably wouldn’t have to leave the campus (though there are exceptions). You can maintain friendships with other residents and continue taking part in community activities.

CCRCs offer their residents a wide variety of activities, including exercise classes, educational and cultural programs, and crafts and hobbies. In addition, they provide shuttle service into town for shopping, special events, and medical appointments. Some communities boast hiking trails and tennis courts or provide access to a nearby golf course. Most communities provide expertly prepared meals in their on-site dining facilities. CCRCs also feature services, such as light housekeeping, snow removal, and some in-unit assistance for those who are mostly independent but could use a little extra help getting ready each day.

People must be 62 to enter a CCRC, but most residents are older. The average entrance age has increased to between 80 and 81 as life spans have increased and healthcare has improved. Typically, a CCRC comprises two or three-hundred independent living units (apartments, town houses or cottages) available at various price points, based on size, layout, and amenities. The location of the CCRC also makes a difference in pricing. For example, the buy-in price for a standard 2-bedroom unit in a small town in the Northeast might cost $500,000, whereas it could run you twice that in a large California metropolitan area. Each CCRC houses a small percentage of assisted living and skilled nursing units proportionate to the size of the community. The number is small since most residents remain independent for more time than they’ll need assistance.

A brief look to the past and the future

Religious groups and fraternal organizations conceived the original concept of a one-stop-shop long-term care community in the early 19th century. The modern version of the CCRC started about 40 years ago. Despite a series of financial setbacks for some communities in the late 1970s and early 1980s, the popularity and financial stability of CCRCs has increased steadily over the years as the U.S. population has aged and a more regulated industry has figured out how to provide cost-efficient quality care on a large scale. There are now approximately 2,000 communities across the country, housing over 650,000 people. Roughly 80% are not-for-profit (NFP) organizations, with 20% being for-profit (FP).

We’re seeing more CCRCs being built across the country as the concept gains popularity. Existing communities are expanding to accommodate a growing number of applicants. Others are undergoing major renovations or overhauling their service offerings to keep pace with aesthetic trends, advances in technology, and the desires of a new generation of residents (expect less Bridge and more Texas Hold ‘Em in the card room in the not-too-distant future). In 2017, CCRCs comprised nearly 8% of the U.S. senior housing supply, and 20% of the units/beds.4 This is likely to increase as the U.S. population ages.  Despite the additional housing inventory, waiting lists for some CCRCs can be more than five years long, although it is more common to wait between 1 and 3 years, depending on the type of residence. That’s not always a negative. Often, the wait enables applicants to discuss the financial implications, emotional adjustment, and logistical challenges of the move with family members.

Considering the pros and cons of CCRC living

CCRCs provide many attractive advantages. The facilities provide:


CCRCs are not for everyone. First, with buy-in prices in the mid-to-high hundred-thousand-dollar range, and monthly service fees in the thousands, the prices can be prohibitive. Each CCRC’s finance department determines an applicant’s financial eligibility. Second, CCRCs will not typically accept an applicant with moderate-to-severe cognitive impairment, and many will also screen out people with a serious medical condition like Parkinson’s Disease, especially in the advanced stage. If they do accept someone with such a condition, they might charge more. Finally, moving to a CCRC involves adjusting to a group living situation. Although there is ample privacy, group living imposes some restrictions on an individual’s lifestyle. “House rules” covering everything from cleaning schedules to pet care may be difficult for those accustomed to having more freedom. In this regard, a person’s own home can be a CCRC’s strongest competitor.

Who is most likely to thrive in a CCRC? According to Barbara Resnick, PhD, CRNP, professor of gerontology at the University of Maryland School of Nursing and a staff member at Roland Park Place, a CCRC in Baltimore, “The people who do best are the ones who can move in early and age in place. What that means also is they tend to be able to live in that environment for longer, because they are so used to the environment that they can manage it much better.”5

What’s in a name?

Despite the vibrant, active lifestyle these communities offer, CCRCs have a branding problem. The very terms, Continuing Care and Life Care, connote a lifetime of needing assisted living or skilled nursing care – a life in decline, if you will. Who wants that? This may contribute to resistance, even among octogenarians, to applying and getting on a waiting list. The more recent term, Life Plan Community, promoted by LeadingAge, an organization focused on education, advocacy, and research on aging, depicts a living environment that fosters new experiences and personal growth. This is what today’s generation of seniors wants most of all. If rebranding efforts are successful, we might start to see lower entrance ages in the future.

In future articles, I will provide an in-depth look at Continuing Care Retirement Communities. I will address the typical services provided, application process, costs, role of long-term care insurance, and ways to evaluate a CCRC to decide the best fit for you.

Meanwhile, I highly recommend that you keep exercising and eat your veggies.

Links to the rest of the series:

Part 2
Part 3
Part 4
Part 5
Part 6
Part 7
Part 8: Wrap-up

1 2017 Genworth Cost of Care Survey, Genworth Financial, Inc., 2017
2 According to the Population Reference Bureau, the number of Americans aged 65 and older is projected to more than double from 46 million in 2016 to over 98 million by 2060, and the 65-and-older age group’s share of the total population will rise to nearly 24 percent from 15 percent.
4 NIC MAP Data & Analysis Service; Q2 2017 Supply Report, All Markets.  NIC MAP® Data Service (NIC MAP) provides comprehensive market data for the seniors housing and care sector, supplying data from more than 15,000 properties within 140 U.S. metro markets.

Rick Fine is a Principal and CERTIFIED FINANCIAL PLANNERTM at Sensible Financial. Have a question for Rick about Continuing Care Retirement Communities? Ask in the comments section below. To speak with someone from our dedicated team about how we can help you plan for your financial future, click here!