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Financial Planning for Seniors | Retirement Center Management


Retirement Planning & Finance Tips for Seniors

Everyone has their own vision of how they’d like to spend their retirement. But as we grow older, there are questions that need to be answered to feel at peace about the future:


  1. What happens if your health declines?
  2. Where will you get the health care you need?
  3. How will you pay for long-term care, if ever needed?


Understanding the answers to these three questions can help make planning for retirement easier. In this blog post, we evaluate two of the most popular senior living options — rental communities and continuing care retirement communities (CCRC) — that answer the questions in different ways.


Evaluating your senior living options: Rental vs. CCRC

Although they share many similarities — well-appointed residences, casual and fine dining, social and educational activities, plus fitness and wellness programs — the range of health services provided and how you pay for care can vary dramatically. In planning for retirement, it’s important to know the differences so you can find the best financial fit for you.


Senior living lingo: You may see the term “Life Plan Community.” A continuing care retirement community and a Life Plan Community are the same thing. They both are full-service communities that offer independent living and a continuum of care.


What is a rental senior living community?

Rental communities are the most popular option, and it’s easy to see why. They’re more affordable to begin with. Unlike a CCRC, there’s no large, upfront entrance fee required at a rental community. There may be a small, one-time community fee, but other than that, you simply pay a monthly service fee for the cost of living in the community.


A rental community also offers more flexibility than a CCRC if you decide you want to move somewhere else. Unlike a CCRC, you’re not bound to a long-term contract that holds onto what’s left of your refundable entrance fee until your residence is resold.


The downside of a rental retirement community is that you’ll be charged the market rate for health services. However, you’ll pay only for the health services you use. And some of the cost could be covered by a long-term care insurance policy.


Do rental communities offer continuing care?

The simple answer to this question is yes. Rental communities come in all shapes and sizes; offering a variety of living options – independent living, assisted living, and memory care. Without requiring an entrance fee or long-term financial obligation, residents can still get care services at an affordable rate. Many of these senior living communities also have exclusive partnerships with care service agencies residents can take advantage of, even if it is a standalone independent living community.


What is a continuing care retirement community?

A CCRC is a senior living community that offers a full “continuum of care,” including independent living, assisted living, memory care, and/or skilled nursing, all on the same campus. Most contracts offered by CCRCs require a large entrance fee, in addition to a monthly service fee. There are three main types of contracts or residency agreements offered by CCRCs: Type A, Type B and Type C.

Type A, Life Care: This type of contract promises to care for residents for the rest of their lives without significantly increasing their monthly fees. If the need arises for a higher level of care, the resident may transfer to the appropriate level of care at a predetermined, substantially discounted monthly rate for as long as care is needed.

Type B, Modified Plan: This type of contract offers priority access to higher levels of living at: 1) a minimally discounted rate, or 2) for a limited number of free days, with additional care at per diem market rates.

Type C, Fee-for-Service: This type of contract offers priority access to higher levels of care at fee-for-service market rates. Essentially, you begin a separate contract for assisted living, memory care or skilled nursing.


Comparing the pros and cons:

CCRC or Life Plan Community

Rental Community

Large upfront entrance fee ($320,000 to over $1 million on average)

Small, one-time community fee ($2,500 on average)

A portion of the entrance fee may be refundable


Monthly fees vary depending on the type of contract, but health services are usually discounted

Fee-for-service model; pay only for the services you use, but long-term care is charged at market rates

Levels of living generally include independent living, assisted living, memory care and skilled nursing

Levels of living vary but may include independent living, assisted living and memory care

Must meet medical and financial eligibility criteria for residency


Less flexibility if you decide to move because your entrance fee won’t be refunded until your residence is resold

Not bound to a long-term commitment if you decide to move


Questions? Count on us for the answers you need.

We know that moving to a senior living community is a big decision. But the better you understand your options, the easier your decision will be. That’s where we can help. Whether you’re interested in a particular Retirement Center Management community or have questions about how our rental communities can fit your planning for retirement, we’re happy to provide answers. To learn more, visit our FAQ page or contact us.


Retirement Center Management


6363 Woodway Dr Ste. 300 Houston, TX 77057