For many people approaching retirement, or those solidly in their retirement phase of life, the question of where to live eventually becomes more layered than simply choosing a neighborhood. Continuing Care Retirement Communities, or CCRCs, offer a compelling proposition: a single community that can accommodate independent living, assisted living, memory care, and skilled nursing as needs evolve, all without having to relocate to an entirely different facility. They can also be among the most significant financial commitments a retiree can make, and they deserve scrutiny that goes well beyond the tour and the brochure.

What Are the Different Types of Continuing Care Retirement Community (CCRC) Contracts?

Entry typically requires an upfront entrance fee plus an ongoing monthly fee. The contract type may also determine how much financial protection you have if higher levels of care are eventually needed:

• Type A (Extensive/Life Care): Generally locks in the monthly fee regardless of the level of care required. This contract type typically involves a higher upfront entrance fee in exchange for more predictable costs as care needs change over time.
• Type B (Modified): Provides some coverage but may expose residents to additional costs at higher care levels. Monthly fees and entrance costs generally fall between Type A and Type C.
• Type C (Fee-for-Service): Residents pay the full market rate for each level of care as needed. Entrance fees tend to be lower, though out-of-pocket costs may increase as care needs grow.
• Type D (Rental, No Entrance Fee): Typically no entrance fee, billed month-to-month. This structure may offer more flexibility with less long-term care cost protection than other contract types.

Depending on the financial resources you have available, fully understanding the trade-offs with each type of CCRC is an important first step.

Is the Continuing Care Retirement Community (CCRC) Properly Licensed and Accredited?

Before your first visit, request the community’s disclosure statement and most recent audited financial statements. Key things to verify:

• Whether the community is accredited by the Commission on Accreditation of Rehabilitation Facilities (CARF) , the only accrediting body specifically for CCRCs
• Whether it holds current licenses for each level of care it claims to offer
• Whether there have been any state survey deficiencies, sanctions, or active litigation in recent years

Not all states regulate CCRCs, which can make your own due diligence especially important in those cases.

How Financially Stable Is the Community?

Several CCRCs have filed for bankruptcy over the past two decades, leaving residents as unsecured general creditors, meaning entrance fee refunds are only paid after secured creditors are satisfied first. When reviewing audited financial statements, pay attention to:

• Occupancy trends and whether operating expenses are consistently covered through operations
• Cash reserves, debt levels, and covenant compliance
• Any forbearance or waiver of default language in the footnotes
• Organizational structure, leadership stability, and whether a benevolence fund exists for residents who outlive their financial resources

Having a financial professional review these reports with you can be valuable to ensure that any community you are considering is financially sound. You are committing both dollars and your health and well-being for years and possibly decades so you want to make sure they will be with you over the long term.

What Do Continuing Care Retirement Community (CCRC) Entrance Fees and Contract Terms Actually Cover?

Entrance fee and contract terms vary considerably and are worth understanding in detail before signing. A few important areas to clarify:

• What percentage of the entrance fee is refundable, under what conditions, and whether it is contingent on the unit being re-occupied.
• What triggers additional charges beyond the standard monthly fee, and what happens if a spouse needs a different level of care.
• Whether any portion of the fees may be tax-deductible as a prepaid medical expense, either as a one-time or ongoing qualified medical expense. Having a large one-time medical deduction can be a helpful tax planning strategy if you need to sell your primary home to fund your entrance fee.
• Whether there is a rescission period during which you can cancel after signing.
• Whether you have access to the equity paid in either as a loan, a line of credit, or something similar to provide you access to this money after buying in.

What Should You Know About Care Quality and Staffing?

Beyond the marketing materials, it is worth asking directly about staffing ratios relative to state minimums, caregiver turnover, and whether the community accepts Medicare and Medicaid at the skilled nursing level. Marketing materials often suggest continued care if funds are exhausted, but the actual contract language may say something different. It is also worth understanding what on-site medical services are available, how memory care programs are structured, and how the community determines when a transition to a higher level of care is needed.

If you have a long-term care insurance policy, you’ll want to understand how your policy interacts with the costs of the CCRC, and at what point does your care qualify as long-term care for you to be reimbursed by the policy.

How Do You Evaluate a Continuing Care Retirement Community (CCRC) Beyond Finances and Care?

Three areas worth covering before committing:

• Lifestyle: What is included in the monthly fee versus billed separately, dining and amenity options, and whether there is an active resident council with meaningful input into community decisions
• Governance: Board expertise, how transparent leadership is with residents about financial matters, and what protections exist if the community is sold or merged
• Legal: Have an attorney review the full residency agreement, not just marketing materials, and ask about arbitration clauses, your rights to leave voluntarily, and what happens to your entrance fee if a community under construction is not completed

What Are the Red Flags to Watch for When Evaluating a Continuing Care Retirement Community (CCRC)?

A few patterns worth treating as signals to investigate further:

• Reluctance to provide audited financials or the actual residency agreement
• Vague answers about what happens if a resident’s financial resources run out
• High turnover among leadership or direct care staff
• Monthly fee increases that have consistently outpaced general inflation
• Active litigation involving refunds, fee increases, or level-of-care transfers

Who Should Be on Your Team Before You Sign?

This is not a decision to navigate alone. Two professionals in particular are worth engaging before committing:

• Elder law attorney: to review the entrance agreement/contract and refund terms
• Accountant or financial advisor: to review audited financials, occupancy trends, and debt ratios, and to model whether your assets and income can sustain both the entrance fee and rising monthly fees over a 10–20+ year horizon
• Financial advisor familiar with CCRC actuarial studies: some communities commission independent actuarial reviews of their long-term obligations; ask to see the summary

At Traveka Wealth, we work with clients across Los Altos and the broader Bay Area to think through decisions like this as part of a broader retirement and financial plan. If a CCRC is something you or a family member are beginning to evaluate, we are glad to be part of that conversation. Schedule a free consultation to discuss your specific situation.

If you are actively evaluating communities or preparing for upcoming tours, download our full CCRC due diligence guide, a comprehensive question set resource designed to bring to every tour, helping you ask the right questions and secure written answers before committing.

Key Sources Referenced Throughout the Blog and Downloadable Continuing Care Retirement Community Due Diligence Guide

• CARF International, Aging Services / CCRC accreditation program — carf.org/accreditation/programs/aging-services/
• State CCRC regulators (e.g., California Department of Social Services — https://cdss.ca.gov/continuing-care-communities, North Carolina Department of Insurance, Pennsylvania Department of Insurance, New Hampshire Insurance Department, Texas Department of Insurance)
• LeadingAge
• myLifeSite (consumer education on CCRC regulation and disclosure statements)
• Elder law commentary on CCRC financial, legal, and social due diligence

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