Are you (or your parents?) ready for a CCRC?

Three years ago, my father suffered a minor but significant health event, which started my parents down the road to a “retirement home.”  Mom was 81 and Dad was 85 years old at the time. And so we began to search in earnest for a place for them to spend their next, and likely last, stage of life.

My parents ultimately decided on a continuing care retirement community (CCRC), an increasingly popular option for seniors. At a CCRC, healthy adults enter “independent living” dwellings: apartments, condos or even single-family homes. Amenities can include restaurants, fitness facilities, on-site medical care, clubs, scheduled trips and group activities.

As seniors age and more assistance with everyday living becomes necessary, the “continuing care” comes into play. Folks have the option to move into an assisted-living or nursing-care facility in the same community. Most CCRCs set a minimum age of 62, but you’ll find the average age to be much higher.

How to pay for a CCRC
CCRCs typically require an entrance fee plus monthly charges. The entrance fee can vary significantly based on the type and size of home that you choose.

Here in the Washington, D.C., area, an entrance fee of $300,000 to $600,000 is not uncommon. What happens to that money can vary, too, depending on the type of contract you choose. If you are in a “life care” facility, the entrance fee generally goes towards any future cost of care that you might need. Your monthly fee does not increase as your need for care increases.

In a fee-for-service arrangement, the entrance fee (or most of it) is returned to the heirs. Any additional care, however, will incur higher fees. It’s important to note that assisted living services can easily cost more than double the regular independent living monthly fee. Full nursing care is more expensive yet.

Not your grandmother’s retirement home

You’re probably getting the idea that CCRCs are not like the old-style, institutional nursing home where your grandmother spent her last days.  They are vibrant and socially engaging communities.

But, don’t wait until a “triggering event” to start planning a move. Most CCRCs require new residents to be in good health and to be able to live independently when they move in. My parents were lucky that my dad’s medical issue was more of a wake-up call and did not prevent them from moving to a CCRC.  

Don’t fear downsizing
The idea of downsizing from the family home for a move to a CCRC can seem daunting. Fear not! Luckily, there’s a whole industry centered on moving seniors into retirement homes.

Check out the National Association of Senior Move Managers. (www.nasmm.org) A senior move manager can shepherd you through the whole downsizing process. They help you decide what to take with you and what to leave to an estate sale or send to auction. They’ll help you with the floor plan in the new apartment to make sure everything will fit. They’ll unpack everything in the new place to make it immediately livable, from making the beds to setting up the kitchen. They really make the whole process much less stressful. Many CCRCs already have a network of move managers with which to work.

If you’re considering a move for yourself, or if you’re an adult child wondering what the future holds for your folks, continuing care retirement communities are worth a look. A review of your (or your parents’) financial plan will give you the peace of mind that such a move will be possible when the time comes. Once you’ve made the decision you could be one of the many who wish they’d moved sooner!

Ann Summerson, CFP®, CDFA ™, is vice president and a financial planner with Baird, joining with The Wise Investor Group in 2007.  The Wise Investor Group www.thewiseinvestorgroup.com) at Robert W. Baird & Co. is a full-service investment firm located in Reston, focusing on financial planning, portfolio management, investment analysis, insurance and annuity services as well as overall account services.