According to Pew Research Center, approximately 10,000 Baby Boomers turned 65 today, and about that same number will reach retirement age every day for the next decade. That’s a lot of retirees! And that’s one of the reasons the retirement living industry is booming in our country with more and more senior living communities opening their doors each year.
Among the choices for retirement communities, two of the most popular options are continuing care retirement communities (also known as CCRCs or “life plan communities”) and independent living communities (also known as rental retirement communities). It is easy to confuse the two because CCRCs actually include independent living communities. In other words, both types have residents that are still living independently and possibly still quite actively in some cases. In fact, if you look up “independent living” online, the results will likely include a number of CCRCs.
Yet, there are also some key differences between the two types of communities, which are important to understand. The differences lie primarily in four areas: services and amenities, healthcare, cost, and intangibles, and these are not mutually exclusive of one another.
Amenities and services
Whether we are talking about CCRCs or rental retirement communities, some offer more in the way of amenities and services than others. Naturally, newer communities will typically offer the latest and greatest in terms of amenities, but even well-established providers undergo renovations and add new amenities to keep up with the latest consumer preferences. Residential living services, on the other hand, are not necessarily tied to the age of the community and can vary widely from one community to the next, depending in large part on cost.
Typical amenities and services found at both CCRCs and independent living communities may include a community clubhouse, lounge areas, event spaces, dining rooms and bistros, fitness center and group fitness classes, swimming pool, housekeeping services, interior and exterior maintenance, scheduled transportation, Wi-Fi, and more.
Although there are definitely exceptions, it is generally thought that CCRCs–as a whole–offer a higher level of amenities and services than stand-alone independent living communities. At CCRCs, you may find a choice of much larger residential living units–including stand-alone cottages and villas–as well as more communal spaces, such as cultural arts centers and galleries. Other common features are personal trainers, gourmet chefs, community gardens, spas, salons and barber shops, theatres, memberships at local clubs, and more. Again, this may not always be the case, and sometimes these features may be found at an independent living community.
Healthcare and other care-related services
The key feature of a continuing care retirement community that distinguishes it from stand-alone independent living communities, and any other type of retirement community for that matter, is a contractual obligation on the part of the community to provide housing and priority access to a full spectrum of care services. Most CCRCs have separate living accommodations that are licensed to provide services to residents who eventually require assisted living, memory care, and/or skilled nursing care, thus the origin of the terms “continuing care” or “life plan” retirement community.
When it comes to care services available at independent living communities, on the other hand, the most common arrangement is to offer supportive care services to residents in their own apartment, which are contracted through an outside home-care services agency. (This keeps the community from having to become licensed as an assisted living provider.) Some independent living communities may have separate residential units available for those requiring these services, but the services are still provided by an outside company in many cases.
Although it is less common, some independent living communities may actually have a separately licensed assisted living facility. Independent living communities are not equipped to provide services for residents who develop needs for higher acuity assisted living or skilled nursing care, therefore, residents requiring these levels of care would need to move to an off-site care facility.
It is generally thought that CCRCs are more expensive than rental retirement communities, and this is often true. CCRCs tend to market to seniors at the higher end of the income spectrum, although some are certainly more affordable than others. The large majority of CCRCs require an entry fee, in addition to the monthly service fee. Among other things, entry fees are used for capital improvements, paying down debt, and sometimes to offset the cost of healthcare services received by residents.
However, in order to do an apples-to-apples comparison of a CCRC to an independent living community, it is necessary to consider a few key points. First, you should understand what is included in your monthly fee and what costs extra. This exercise is helpful when comparing any two retirement communities, regardless of the type. The published monthly rate may not include services or amenities that you might like to utilize, which would increase your monthly cost.
Second, the process of comparing the month-to-month cost shouldn’t end with independent living. What if you eventually require advanced assisted living or around-the-clock nursing care? Depending on the type of residency contract, some CCRC residents may see little or no monthly increase for these services.
However, as described previously, independent living communities do not provide higher levels of care. Therefore, if a resident of an independent living community requires such services it would necessitate a move to a care facility, where the resident would begin paying the market rate for those services. These costs can be exorbitant, ranging as high as $12,000 or more per month for skilled nursing in some areas of the country, not to mention the stress and other associated costs of such a move. The point here is that you should consider total lifetime cost and not just the cost today. On the flip side, if these types of care services are never required, then independent living would almost surely prove to be the less costly option, but none of us can predict the future.
Lastly, it is important to consider the value you place on the intangibles. Many residents of CCRCs say they find great peace of mind living someplace that makes available the types of services they may eventually require–often describing it as a gift to their children who may otherwise shoulder a heavy caregiver burden. Planning for the cost of care is one thing, but having access to care is also important to many seniors. So, the question is really: How much it is worth to you to have a plan in place for the future?
Understanding your senior living choices
Exploring your options for housing during your retirement years is a big part of planning effectively for your retirement. If you are considering a senior living community, it’s important to understand the differences between the various types of communities so you can make a more informed choice about which one you feel is right for you.
To learn more about CCRCs in your area, visit our free online community search tool, which offers profiles on hundreds of CCRCs.