Continuing care retirement communities (CCRCs)

A continuing care retirement community, increasingly marketed as a "life plan community," makes a promise no other housing option does: move in while you are independent, and the same campus will house and care for you through assisted living, memory care, and skilled nursing if you ever need them. In exchange, most communities charge a large entrance fee plus a monthly fee, under a contract that can run longer than many marriages.

That structure makes a CCRC three things at once: real estate, prepaid insurance against future care costs, and a long-term bet on one organization's solvency. There are close to 2,000 of these communities in the United States, and roughly four in five are run by nonprofits, many with religious or fraternal roots ¹. The model works well for most residents most of the time, but the contracts are complicated, oversight is uneven, and failures, while uncommon, have cost residents dearly. This is a purchase that rewards slow, documented diligence more than almost any other in retirement.

Unlike the age-restricted neighborhoods and rental buildings described under retirement communities, a CCRC asks you to commit capital against needs you may not have for 20 years, which is why the details below matter.

How the model works#

Communities typically admit new residents who are at least in their early 60s, able to live independently, and financially and medically screened. You start in an apartment, cottage, or villa with services like dining, housekeeping, and activities. If your needs change, you move within the campus to assisted living or the health center, the on-site equivalent of a nursing home, with priority access ahead of outside applicants. Couples value the design because a spouse needing care stays a short walk away rather than across town.

What you pay when care begins depends entirely on which contract you signed at the start.

The four contract types#

Type A costs the most up front precisely because it transfers the most risk: a resident who spends four years in the health center pays little more per month than a healthy neighbor in independent living ². Type C looks cheaper and is, for people who never need much care; a long stay in the health center at $10,000 or more a month reverses the comparison. Type B sits in between, and rental contracts strip out the insurance element entirely. None of the types is a bargain or a trap by itself; they price the same uncertainty differently, and long-term care insurance can pair sensibly with the fee-for-service versions.

Sources for this section: [2]

What it costs#

Entrance fees range from about $40,000 at modest communities to more than $2 million for the largest homes at high-end ones ². Six figures is typical: the average tracked by the National Investment Center was about $402,000 in 2021 ² and had reached roughly $490,000 by 2026 ³. Most people fund the fee by downsizing, selling a long-held house.

The fee usually comes in two flavors. A declining-balance (or amortizing) fee is lower but burns down to zero over several years of residency, after which nothing returns to you or your heirs. A refundable fee, commonly 50 to 90 percent, is substantially higher for the same home but pays the stated percentage back to you or your estate when you leave or die, in most contracts only after a new resident occupies the unit. Monthly fees for independent living residents averaged around $4,200 as of early 2026 ³, covering dining, housekeeping, maintenance, activities, and a layer of staffing that rental buildings do not carry. Fees rise essentially every year; a community's last ten years of increases is a fair preview of your next ten.

Sources for this section: [2] [3]

Vetting a community's finances#

You are prepaying for decades of future service, so the community's balance sheet is your business. State oversight will not do this work for you. As of 2024, 41 states had statutes regulating CCRCs, up from 38 in 2010; the rest have no CCRC-specific rules, oversight in regulating states runs through a scattering of agencies (insurance departments, financial services, aging services), and no federal agency supervises them at all ⁵⁶⁹. A Government Accountability Office review reached the polite conclusion that CCRCs "can provide benefits, but not without some risk," noting that residents bear much of that risk ⁶. The rules are not frozen, either: North Carolina replaced its CCRC statute with a licensing law effective December 1, 2025, which requires an actuarial study at least every three years, an occupancy-linked operating reserve, and written notice to the state and all residents within 10 business days once any entrance fee refund runs more than 30 days past due ¹⁰. Washington the same year extended its Consumer Protection Act to cover all of its CCRC registration requirements, so the attorney general or a private citizen can sue over violations ¹¹.

The standard due-diligence file, which any well-run community will hand a serious prospect, includes:

• Audited financial statements for the past several years, plus the disclosure statement required in most regulating states ⁴.
• Occupancy rates. Sustained independent living occupancy of 90 percent or better signals demand; communities in trouble almost always show slipping occupancy first ⁴¹². For a national baseline, entrance fee CCRCs averaged 91.6 percent occupancy in the first quarter of 2025, ahead of the 88.7 percent at rental CCRCs ¹³.
• Days cash on hand, a ratio showing how many days of operating expenses the community could cover from liquid reserves, along with its debt load and debt service coverage. Rating services read more than 450 days of cash as considerable financial flexibility and under 200 as limited, which is less of a worry when debt is low ⁴¹².
• An actuarial study, which projects whether fees from current and future residents can fund the care already promised. This matters most for Type A contracts, where the community has sold insurance it must be reserving for ⁴.

An accountant or fee-only financial planner can read these documents in an hour or two. Nonprofit status is reassurance, not protection; nonprofits borrow through bonds and can fail like anyone else. Voluntary accreditation exists (CARF International accredits aging-services organizations), but most communities are unaccredited, so its absence means little and its presence is a modest plus.

Sources for this section: [4] [5] [6] [9] [10] [11] [12] [13]

When communities fail, and when residents outlive their money#

CCRC bankruptcies are rare, but they happen, usually at single-site communities carrying heavy construction debt; a CBS News review counted at least 15 CCRC bankruptcy filings in the six years before late 2025 ⁷. The instructive case is Harborside, a community in Port Washington, New York, which filed for bankruptcy for the third time in March 2023 owing residents and their families about $130 million in entrance fee refunds ¹⁴. The community was sold for $86 million, and families recovered roughly 25 to 33 cents on the dollar on their refund claims ⁷¹⁵. The legal mechanics were the painful part: refund promises made residents unsecured creditors, standing in line behind bondholders. At Harborside, the first $6 million for residents moved only after bondholders agreed to release it from the sale proceeds ¹⁴.

Caution: An entrance fee refund is a promise from the community, not money held in escrow for you in most states. If the community fails, the refund becomes an unsecured claim; even in good times, many contracts pay refunds only after your former home is resold. Ask what security, escrow, or reserve requirements your state imposes, and read the refund conditions word by word ⁷.

The gentler failure case is personal: a resident who outlives their savings. Most nonprofit communities maintain benevolence or resident-assistance funds and say, accurately, that they have never made anyone leave for running out of money in good faith. But such funds are discretionary charity, not a contractual right, and the entry screening exists precisely to make them rarely needed. Reasonable questions: how large is the fund, how many residents does it support now, and has assistance ever been refused? Residents who exhaust everything may also end up relying on Medicaid, which some communities' health centers accept and others do not; the contract will say.

Sources for this section: [7] [14] [15]

The contract, the lawyer, and the taxes#

CCRC residency agreements run dozens of pages and are worth a few hundred dollars of an elder law attorney's time before signing, not after. Points that deserve specific answers in writing:

1. Exactly which care levels are included, at what rates, and who decides when you move between them.
2. How the refund works: percentage, conditions, timing, and what happens if you die or leave during the first years.
3. What fees can rise, how often, and whether any cap applies.
4. Second-person fees for a spouse, and what happens to fees when one spouse moves to the health center or dies.
5. Whether you must carry Medicare, supplemental coverage, or long-term care insurance as a condition of the contract.
6. Under what conditions the community can terminate the agreement or require a move you do not want.

A signature is not always the point of no return. GAO found that 30 of the 38 states with CCRC-specific laws at the time required contracts to include a cooling-off period; in the states it examined, cancellation windows ran from 7 days after signing to 90 days after occupancy ⁶. Confirm your state's window, and what you get back if you cancel inside it, before money changes hands.

There is one genuine tax sweetener. Because part of your entrance fee and monthly fees prepays medical care, the IRS lets you count that portion as a medical expense: the community calculates the percentage each year (based on its aggregate medical costs) and reports it to residents ⁸. The entrance fee portion is deductible only in the year paid, only from the nonrefundable part, and like all medical expenses it helps only above 7.5 percent of adjusted gross income for itemizers. In the year of a large entrance fee, the deduction can be worth tens of thousands of dollars, which changes the math on when to sell securities or take retirement withdrawals; taxes in retirement covers the mechanics.

A CCRC is not the only way to secure care; aging in place with insurance or savings does the same job with different risks. What the CCRC uniquely offers is a settled answer, on one campus, to the question of where each stage of later life will happen, for those satisfied the institution behind the promise will outlast them.

Sources for this section: [6] [8]

RetiredWiki. (2026, July 18). Continuing care retirement communities (CCRCs). https://retiredwiki.com/article/continuing-care-retirement-community