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5 Key Questions to Ask When Choosing a Continuing Care Retirement Community

Moving into a continuing care retirement community is a major financial decision. Here are key questions to ask before you commit.

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If you or someone you love is evaluating senior living options, you may want to look into a continuing care retirement community, or CCRC.

A CCRC campus typically includes homes, condos, or apartments for independent living, as well as an assisted living facility and a nursing home. That means you can move in while you’re healthy and able to live independently, and transition to skilled care as your needs change.

Jessica Lillesand, Vice President – Senior Advisory Specialist of Life Management Services for Wells Fargo Private Bank, says she likes CCRCs because they allow you to make a plan for yourself while you still have the capacity to do so, and you know up front what the cost will be. CCRCs also make it easy for seniors to stay active. “I often compare CCRCs to cruise ships,” she says. “Everything you need—friends, activities, dining options—is at your fingertips.”

Most CCRCs have a sizable entrance fee (typically funded through the sale of your home) as well as a monthly fee, making this a big financial decision. To help you make the best choice for you or your loved one, Lillesand recommends visiting several CCRCs with a friend or family member. Here are some key questions to ask:

1. Can I see a five-year history of monthly cost increases? 
“If costs have been increasing substantially, that’s not a positive indicator of financial health,” Lillesand says. Find out if there’s a cap on rate hikes. And how do the fees change when you enter assisted or skilled care? Once you have a good understanding of costs, your financial advisor can help you figure out what level of contract you can afford based on your assets and cash flow.

Remember that entry fees usually vary based on the type of contract you choose. Extended care contracts cost more up front but limit future cost increases, while fee-for-service contracts have lower entry costs.

2. What services are included and what costs extra? 
Some continuing care retirement communities charge separately for amenities such as laundry, housekeeping, activities, and meals, while others include them in one monthly rate. Ask for the fee charged for each level of care and get a list of what’s covered. How many meals per day are included? Is there an extra charge for transportation? Who pays for home repairs? Do residents have to pay to participate in activities?

3. Can I get a copy of your financial statements? 
Your goal is to make sure that the CCRC is financially sound. Take a look at the structure and management of the community. Who are the company’s owners? What is their track record with other communities they own or manage? Take a copy of the community’s financial statements to your financial advisor for review. Also ask about the current occupancy rate. A low rate can indicate financial instability, Lillesand says, and the community may have a harder time hiring all the staff they need.

4. How do you like living in this continuing care retirement community? 
If you can get access to it, resident feedback is often a great indicator of potential enjoyment. If possible, ask any friends who live there to share honestly what they like and don’t like about the community. Even if you don’t know anyone, eat a meal or two in the dining areas and listen in on the conversation. You can also reach out to a few residents for feedback; ask what surprised them once they moved in.

On top of that, make at least one unannounced visit and make sure you check out the areas that aren’t on the formal tour. “They probably won’t take you into the skilled care area (nursing home) area, but it’s essential to see it since that’s where you’ll go when you’re at your most vulnerable,” Lillesand says. Take note of the community cleanliness and upkeep, and check out that week’s activity list to see if you’d actually participate in any of the events.

5. Which of your services does Medicare not cover? 
“Many people are really surprised to know that home health is not one of those covered costs,” Lillesand says. Other things to look for in the contract with the continuing care retirement community: How will your living arrangements and costs change when you need more medical or in-home care? Are you guaranteed a bed in the skilled care area on site? Who makes the decision about when to move a resident to a different level of care? Can you use an outside company for home health care or medical care, or are you required to use the facility’s providers?

For even more questions to ask when choosing a continuing care retirement community, ask your relationship manager for the Wells Fargo Life Management Services’ guide, “Is a Continuing Care Retirement Community the Right Move for You?”

Michelle Crouch writes about consumer finance, parenting, and more from her home in Charlotte, North Carolina. Her work has appeared in Reader's Digest, Parents magazine, and The New York Times. Image by iStock

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Wells Fargo and Company and its affiliates do not provide legal advice. Wells Fargo Advisors does not provide tax or legal advice. Please consult your tax and legal advisors to determine how this information may apply to your own situation. Whether any planned tax result is realized by you depends on the specific facts of your own situation at the time your taxes are prepared.


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