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What Questions to Ask When Researching a CCRC

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Continuing care retirement communities, often referred to as CCRCs or life care communities, can be a great choice for retirees who live independently today but seek the peace of mind afforded by residing in a community that is equipped to provide long-term care services if needed in the future.

However, CCRCs are not all created alike and the various types of residency contracts are often difficult for some to understand. Once you have identified a particular community that you feel will meet your lifestyle preferences here are a few important questions to ask:

1.   How does your residency contract work in terms of monthly pricing? 

What this really gets at is seeking to gain an understanding of how your fees adjust if you ever move from an independent living residence into an assisted living or healthcare residence within the community. This is particularly important to understand when there are two residents or spouses and one needs care.  

2.   Is there an entry fee and how much of the entry fee will be returned if you move out or in the event of death. 

Many communities offer a declining balance contract whereby you will receive some portion of the entry fee back if such an event occurs during the early years of residency but not beyond a point, usually 2-3 years. However, some communities offer a refundable contract whereby some portion is refundable no matter how long you live in the community. However, a resident will typically pay a higher entry fee for a refundable contract than for a declining balance contract. Also, be sure you are clear on the exact stipulations for receiving the refund.

3.   What assurances can you give me that your community will remain financially solvent for the long-term?

Although no one could ever be expected to guarantee solvency there are a number of things that a provider should be able to tell you that give you a higher level of confidence. A few examples would be: a consistent level of high occupancy (which is evidence of a high level of on-going demand for the community, an experienced management company, a short average turnover rate for occupied units, strong financial ratios compared to industry averages, positive net worth, a strong financial assistance fund and donor base (for non-profits), and a clean audited financial statement.

4.   What assurances can you give me that your community will provide high-quality assisted living and health care services? 

Ultimately one of the main reasons for choosing a CCRC is the knowledge that healthcare services will be available when needed. Therefore it is important to be sure that these services will be top notch. If a provider shies away from talking about this or does not provide convincing answers it could be a red flag.

By: Brad C. Breeding, CFP ® President & Co-Founder-My LifeSite : brad@mylifesite.net 

Brad is co-founder of My LifeSite (formerly LifeSite Logics), a North Carolina company that develops web-based tools and resources designed to help families make better-informed decisions when considering a continuing care retirement community.

What is a Continuing Care Retirement Community?

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For the average person it is often difficult to distinguish one retirement community from another. Almost all retirement communities cater to those who are still able to live fully or mostly independently. However, the differences become more evident beyond that point because many communities are not able to provide services for their residents if they should ever require advanced assisted living or nursing care. In that case a resident who requires such services may have to move out of the community and into a more appropriate off-site setting, such as a long-term care facility, memory care center, or nursing home- depending on the type and level of care needed.

Yet, there is one type of retirement community that is unique from all others because it offers services across the entire continuum of care, typically ranging from independent living all the way through to skilled nursing care. This type of community is often referred to as a Continuing Care Retirement Community, or CCRC. CCRCs provide a contractual promise to provide lifetime housing and care for their residents. This translates to peace of mind for the resident, and their family members, because they know that no matter what their needs may be the community will be able to care for them.

Continuing Care Retirement Communities require that residents move in while they are still able to live independently. In fact,most CCRCs will perform a health evaluation to help ensure that new residents are not an increased risk for healthcare needs. (Additionally, since CCRCs are contractually guaranteeing housing and care for life they will often do a financial evaluation, as well, to help reduce their degree of financial risk in fulfilling that promise.) However, if a resident that resides in an independent living unit begins requiring assisted living, or even a higher level of care,the CCRC is equipped to provide those services, often having an assisted living facility or skilled nursing center on site.

If you are considering a retirement community and think you would like the peace of mind afforded by having contractually guaranteed access to a continuum of care when the time comes, then a CCRC may be a good choice for you. However, it is important that you do the appropriate research, In Part II I will describe the various types of contracts offered by CCRCs and provide a few important questions you should ask of any community you are considering.

By: Brad C. Breeding, CFP ® President & Co-Founder- My LifeSite : brad@mylifesite.net 

Brad is co-founder of My LifeSite (formerly LifeSite Logics), a North Carolina company that develops web-based tools and resources designed to help families make better-informed decisions when considering a continuing care retirement community.