Continuing Care Retirement Community: 5 Critical Mistakes
A continuing care retirement community is one of the biggest decisions you can make in retirement. It can also be one of the most expensive ones to get wrong. This guide walks through the 5 mistakes families make most often at this stage, and what to do instead.
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What Is a Continuing Care Retirement Community?
A continuing care retirement community (also called a CCRC or life plan community) is a place where you can live on your own now, and get more help as you age, all without having to move somewhere new. You move in while you’re healthy. If you need more care later, it’s right there for you. Same home. Same neighbors. Same community.
That’s the idea. And it works well for a lot of people. But there’s a big gap between what sounds good in a brochure and what you’re actually agreeing to. To see how CCRCs fit with your other housing options, read our Senior Living Options guide.
Before you move in, you sign a contract. That contract spells out your costs, your care, and what happens if things change. Most people spend more time reading a phone bill than they spend reading that contract. Here’s what you need to know first.
What a CCRC Typically Includes
- Your own apartment or cottage where you live on your own
- Access to more help if your needs change over time
- On-site nursing care and memory care (what’s covered depends on your contract)
- Meals, housekeeping, rides, and activities
- An upfront fee when you move in, plus a monthly fee after that
Mistake #1: Waiting Until a Health Crisis to Start Looking
This is the most common mistake. Most people plan to look into a continuing care retirement community when the time comes. But by then, it’s often too late for two reasons.
First, most CCRCs require you to be healthy enough to live on your own when you move in. If you’ve had a serious illness, a fall, a hospital stay, or memory problems, many communities will turn down your application. It’s not personal. The community is agreeing to take care of you for the rest of your life, so they need you to be in reasonably good shape when you start.
Second, the best communities have long waitlists. Popular CCRCs routinely report waits of one to five years, and some highly sought-after communities are even longer. The window to get on a list, before you are ready to move, is often narrower than families expect. The good news: you don’t have to be ready to move to get on a list. Many communities let you hold your spot years before you actually plan to go.
Mistake #2: Not Understanding What Type of Contract You’re Signing
There are three types of contracts used at continuing care retirement communities. The difference between them can add up to hundreds of thousands of dollars over your lifetime. Most families don’t know this until someone hands them a contract to sign.
| Contract Type | Upfront Fee | Monthly Fee | Care Coverage | Good For |
|---|---|---|---|---|
| Type A: Full Care | Highest (often $200K to $1M+) | Higher, but stays steady even if you need more care | All levels of care included, no extra charge | People who want predictable costs no matter what happens |
| Type B: Partial Care | Moderate (often $100K to $500K) | Moderate; more care costs extra, but at a discount | Some care included; higher care levels cost more | People okay with paying more if they need more care later |
| Type C: Pay As You Go | Lowest (often $40K to $300K) | Lower at first; goes up a lot if you need more care | You pay full price for any care beyond basic housing | People with plenty of savings who want a lower entry cost |
Fee ranges are directional estimates. For context, the National Investment Center for Seniors Housing & Care (NIC) reported an average CCRC entrance fee of approximately $414,000 in 2022, per Kiplinger. Actual amounts vary significantly by community, location, contract type, and amenity level. Always request a written fee disclosure from any community you are considering.
Type A costs more upfront but protects you if you need a lot of care later. If you end up needing years of nursing home care, a Type A contract could save you a great deal of money. Type C looks cheaper to start but your costs can grow fast if your health changes. Neither is always the right choice. The best pick depends on your health, your savings, and how much cost uncertainty you can handle.
Mistake #3: Treating a CCRC Like Assisted Living
These are two very different choices. People mix them up all the time, and it leads to comparing the wrong things. Assisted living is usually something families look into after something goes wrong. A health scare. A fall. A moment when living alone doesn’t feel safe anymore. A continuing care retirement community is a choice you make ahead of time, while you’re still healthy and living on your own.
Continuing Care Retirement Community
- You move in while healthy and living on your own
- You pick the community when you have time to be choosy
- Your care is written into your contract from the start
- You build a life in a community you chose yourself
- Requires a large upfront payment and a long commitment
Assisted Living
- Usually happens after a health change or safety concern
- Decision is often made quickly, under pressure
- Monthly cost covers what you need right now
- No big upfront fee or long contract in most cases
- Easier to leave or switch communities if things change
If you already need help with daily tasks, a CCRC may not accept you. Most require you to move into the independent living section first. If that’s not where you are right now, assisted living or help at home may be a better first step. See our post on when to consider assisted living for more.
Mistake #4: Underestimating the Real Total Cost
The upfront fee is the number most people focus on. But it’s only part of what you’ll pay. There are two main costs to plan for.
The upfront fee is what you pay when you first move in. These fees range from around $40,000 on the low end to over $1 million at high-end communities. Type A communities, which provide the most comprehensive care coverage, typically carry the highest upfront fees. The table above gives a rough sense of where each contract type falls, but actual amounts vary significantly by community and location. Part of this fee may come back to you if you leave or pass away, depending on your contract. Some contracts return a large portion of it. Others keep all of it. The refund terms vary widely, so read that section carefully before you sign.
The monthly fee covers your apartment, meals, housekeeping, and some or all of your care. Monthly fees usually run $3,000 to $6,000 or more. They go up a little each year, and can go up more if you need more care under a Type B or C contract.
One more cost to think about: the gap. If you’re selling your home to pay the upfront fee, there’s often a stretch where you’ve committed to the CCRC but your home hasn’t sold yet. You could be paying for both places for weeks or even months. Plan for that in advance.
Mistake #5: Not Asking What Happens If You Run Out of Money
This is the question nobody wants to bring up on a tour. It’s also the most important question you can ask before you sign anything.
Different communities handle this differently. Many nonprofit CCRCs keep a special fund to help residents who run out of money through no fault of their own. These communities promise not to force out a long-time resident who simply used up their savings over many years of living there. For a lot of people, that promise is one of the biggest reasons to choose a continuing care retirement community over other options.
For-profit CCRCs and some smaller communities may not offer this. If your money runs out, you might have to leave. What happens is written into your contract, but every contract handles it differently.
It’s also smart to look into a community’s money situation before you sign. An independent group called CARF checks and certifies CCRCs that meet certain financial and care standards. Communities they certify have to share yearly financial reports. CARF also publishes a free Consumer Guide to Life Plan Communities that walks through what to look for before you sign. Having a financial advisor look those over can tell you whether the community is in good shape for the long run.
Frequently Asked Questions
What are the disadvantages of a CCRC?
The biggest downsides are the high upfront cost, the long commitment, and the fact that it can be hard to back out once you’ve signed. The upfront fee alone is often $100,000 to $500,000 or more. Monthly fees go up over time. If you want to leave or you’re unhappy with the community, getting your money back can be complicated depending on your contract. CCRCs also don’t work well if you already need a lot of help when you move in, since most require you to start by living on your own.
What’s the best age to move into a CCRC?
Many people move into a continuing care retirement community in their 70s. But many advisors suggest starting your research in your late 60s. The reason is simple: communities have health rules to get in, and popular ones have waitlists of two to five years. If you wait until you feel like you need to move, your choices may already be limited. The best time to look is when you still have time to be picky.
What is a Type A CCRC?
A Type A CCRC, sometimes called a life care community, gives you the most coverage. You pay a higher upfront fee, but after that, your monthly costs stay pretty steady even if you eventually need full-time nursing care. The community takes on the financial risk of your future care. It’s the most predictable option if you’re worried about how much care might cost down the road.
How much does a CCRC cost?
It varies a lot. Upfront fees range from around $40,000 for a basic pay-as-you-go contract to over $1 million at a top-end community. Monthly fees for independent living usually run $3,000 to $6,000 and go up a bit each year. Under a Type B or C contract, your monthly costs can rise a lot if you need more care. Under a Type A contract, your monthly costs stay more steady no matter what level of care you need.
What is the difference between a CCRC and assisted living?
A continuing care retirement community is something you choose ahead of time, while you’re healthy, and it comes with a written promise to care for you as you age. Assisted living is something most families turn to after a health change has already happened. CCRCs require a large upfront fee and a contract. Assisted living is usually month-to-month with no big upfront cost. CCRCs give you more long-term security. Assisted living gives you more flexibility. See our guide on senior living options for a full look at all your choices.
Is a CCRC worth it?
For many people, yes. Especially if you want to stop worrying about where you’ll live as you age, and you want your care built into one plan you can count on. The money commitment is real, and it takes some homework to get right. But for people who can afford it and take the time to understand the contract, a good continuing care retirement community means you have already made the decision, before a crisis forces someone else to make it for you. The key is doing that on your own schedule, while you still have good options to choose from.
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Content on SetToRetire.com is researched and drafted with AI assistance, then reviewed and edited for accuracy by the editorial team at Senior Media Group LLC. It is provided for general informational purposes only and does not constitute medical, legal, or financial advice. CCRC contracts are legally binding and financially significant. Consult a qualified attorney and financial advisor before signing any continuing care retirement community agreement. For more on how we create content, see our Editorial Process.
