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CCRC: A Senior Campus That Ages As You Do

Today’s economy has most over age 55 worrying about their retirement nest egg, long term health care, social security viability, living longer and how they’ll manage their lifestyle in the future.

We’d like to believe we won’t ever need to move into an assisted living community or skilled nursing center, however, the statistics are against us. According to the American Association of Homes and Services for the Aging (AAHSA), after age 65, Americans have more than a 70% chance of needing some form of long-term care. The reality is that not all people age as gracefully as they would like – which can have significant financial consequences.

Did you know there are approximately 2,200 continuing care retirement communities (CCRCs) that provide affordable retirement living options for seniors age 62-100 plus and are designed for those who do not want to worry about outliving their assets or costly long term nursing care down the road?

It’s a 40 year old concept that was started by faith-based, not-for-profit organizations with the mission to help seniors age gracefully. It’s called a Type A life care contract, and it is offered by not-for-profit continuing care retirement communities (CCRCs) such as ACTS Retirement-Life Communities, headquartered in Pennsylvania but with locations in six states.

“For people who are really worried about outliving their money (and given the turbulent economy who’s not?), Type A is the best choice,” said Margery Schiller, a financial planner based in Florida. “It provides the most peace of mind because everything is included in the monthly fee. There are also significant tax savings (30-40%) as the entrance and monthly fee may be tax deductible as a prepaid medical expense.”

Many retirement communities offer modified life care programs and pay-as-needed health care plans, but how does this benefit the average senior when prices continue to skyrocket and no one knows what services will be needed? The current senior housing options available include:

1) Age-restricted housing – these communities are often referred to as active adult’ communities and one partner must be age 55 or over to enter. These communities may include single family homes, condos or apartments with some outside maintenance done. No meals, health care or transportation are provided. Home health care workers must be contracted privately should a need arise (approx $32 per hour).

2) Assisted living centers – provide a special combination of residential housing, personalized supportive services and care; meal plans are available and you pay-as-needed (approx. $35,628 per year).

3) Skilled nursing centers – provide complete 24-hour care for those unable to care for themselves at a cost of approx $77,745 per year.

4) Continuing Care Retirement Communities (CCRCs) – These communities usually target people age 62 and above and combine age-restricted housing, assisted living, skilled nursing, transportation, maintenance, food, activities and a wide range of amenities. Residents must be able to live safely alone in their apartments when they move into the community. CCRCs offer three types of contracts:

Extensive contracts (Type A) offer life care insurance to residents. Residents benefit from an entrance fee and monthly maintenance fee which may be partially tax deductible (up to 30-40%). The monthly fee does not increase if a higher level of health care is needed, including assisted living and skilled nursing care, which normally is offered on the CCRC campus. Type A contracts are the safest and most affordable option, and are usually offered by not-for-profit organizations where revenue is reinvested into the communities for upgrades. Type A contracts are an alternative to expensive long term health insurance.

Modified contracts (Type B) typically require an entrance fee and a monthly maintenance fee. Lifetime access to assisted living and skilled care is on a fee-for-service basis. The monthly service fee increases as levels of care increase. Residents may receive a discounted rate for the care and a specified number of days of long term nursing care at no additional cost.

Fee-for-service contracts (Type C or rental) may initially offer a lower monthly service fee than with other types of contracts, however, residents are responsible for all costs of additional health care as they are needed. No resident discount, benefits, or any free long-term-care days are earned. Type B and C fee-for-service contracts are usually offered by private for-profit providers.

When doing research on CCRC living, visit www.carf.org which lists all those communities nationwide that are accredited, which means they have voluntarily gone through a rigorous process of their governance, finances and services.