A continuing care retirement community (CCRC), also called a life plan community, offers independent living, assisted living and nursing care on one campus under a long-term contract. Most charge an entrance fee plus a monthly fee. In New York, entrance fees run about $200,000 to $1 million. The contract type (A, B or C) decides whether fees rise when care needs do.
Key facts
- Continuing care retirement communities let residents move among independent living, assisted living and skilled nursing care in one community, usually under a Type A (life care), Type B (modified) or Type C (fee-for-service) contract. (U.S. GAO, 2010)
- New York's Department of Financial Services says CCRC entrance fees in the state range from about $200,000 to $1 million, plus a monthly fee of about $2,000 to $5,000. (New York DFS, undated)
- IRS Publication 502 lets you include in medical expenses the part of a life-care fee or "founder's fee" paid to a retirement home that is properly allocable to medical care. (IRS, 2025)
- Pennsylvania's Insurance Department regulates CCRCs that charge large upfront entrance fees, and each CCRC must give prospective residents a disclosure statement on its finances that is updated every year. (Pennsylvania Insurance Department, undated)
- In Florida, a resident can cancel a continuing care contract within 7 days after signing it and get a full refund of any money paid. (Florida Statutes, 2025)
Your dad wants to sell the house and move to the continuing care retirement community across town, the one with cottages, a dining room and a nursing wing. The sales office has sent a residency agreement, a thick disclosure statement and an entrance fee that looks a lot like the price of his house. Industry participants told the GAO in 2010 that this fee can be a large share of a person's assets, sometimes all of them. This post explains the contracts, the fees, the IRS rules and the questions to bring to a lawyer.
The refund questions that protect the entrance fee are in the section on checking the contract before signing.
This post explains how CCRCs and their contracts work. For decisions about the contract, the money or taxes, talk with an elder law attorney, an accountant or a tax professional.
What is a continuing care retirement community?
A CCRC is a campus that offers housing, services and health care in one place, under a contract that usually lasts for life. New Jersey's consumer guide notes that the industry now often calls these campuses "Life Plan Communities."
Most residents start in a cottage or apartment and live on their own. The GAO says they generally move to the community's assisted living when they need help with eating, dressing or bathing. If they need care around the clock, they move to its skilled nursing unit.
In return for a large entrance fee, the community makes a long-term promise of care. In California, a continuing care contract is a promise of services for more than one year, usually for life, to a person 60 or older. Applicants are generally screened for health and must show income and tax records, the GAO found.
How is a CCRC different from assisted living?
The biggest difference is timing. A CCRC is usually a plan for later care, chosen while a parent can still live on their own. Assisted living is for a parent who needs daily help now.
| Question | CCRC | Moving straight into assisted living |
|---|---|---|
| Who moves in | Mostly people who can live on their own at entry, after a health and money screening | People who already need help with daily activities |
| Up-front cost | An entrance fee, about $200,000 to $1 million in New York | Ask about a one-time community fee or deposit, and whether any is refunded |
| Monthly cost | A monthly fee; whether it rises with care depends on the contract type | Rent plus care charges; ask how each care level is priced |
| When care needs grow | A move to the campus's assisted living or nursing unit, often with priority admission | Ask what care the community can't provide and what happens then |
| The contract | A long-term contract that many states regulate | A residency agreement under the state's assisted living rules |
Pennsylvania's Insurance Department notes that CCRCs can suit couples with different health needs, since both can live on the same campus while one gets more care.
If your parent already needs help with bathing or medicines, ask early whether the CCRC takes new residents straight into assisted living. The GAO found that some do. Our post on independent living vs. assisted living explains where the line between the two falls.
What are the CCRC contract types?
The contract type decides who carries the risk of rising care costs, your parent or the community. The GAO describes four types:
- Type A, life care or extensive. Housing, services and unlimited use of health care, at little or no increase in the monthly fee when a resident moves to assisted living or nursing care. Entrance fees are generally substantial. The community takes on the risk of higher care costs.
- Type B, modified. The same housing and amenities, often with lower monthly fees, but only some health care is included. In the GAO's example, a resident gets 30, 60 or 90 days of assisted living or nursing care at no extra charge. After that, they pay the market daily rate or a discounted one.
- Type C, fee-for-service. The same housing and amenities, with all health care paid at market rates as it's needed. Entrance and monthly fees may be lower, but the resident carries the risk of high care costs.
- Type D, rental. Offered by some communities, generally with no entrance fee.
Labels vary by state. In California, a "life care contract" must promise all levels of care for life, no change in the monthly fee based on care level, and help for residents who can no longer pay. Other contracts may use similar words and promise less.
How much does a CCRC cost?
Expect a one-time entrance fee and a monthly fee. Both vary with the state, the unit and the contract type.
- New York. Entrance fees of about $200,000 to $1 million, depending on the size and type of home, plus a monthly fee of about $2,000 to $5,000 (New York Department of Financial Services).
- Pennsylvania. Entrance fees from several thousand dollars to $1 million, and monthly fees from a few hundred to several thousand dollars (Pennsylvania Insurance Department).
- Massachusetts. The state's aging agency says most CCRCs charge an entrance fee "usually like the cost of purchasing a house in that town."
Under a Type C contract, care in assisted living or nursing is charged on top of the monthly fee at market rates. To compare, see what assisted living costs on its own.
The refund terms change the real price. The GAO lists four common refund plans:
- Fully refundable fees, which cost more at the start.
- Partly refundable fees, with a set percentage returned within time limits.
- Fees that shrink by a set percentage each month.
- Fees that aren't refundable after a certain time.
In Pennsylvania, the community usually earns the fee over a number of years, typically five. The part not yet earned is refunded to a resident who dies or leaves.
Monthly fees go up over time. Pennsylvania requires communities to disclose their increases over the last five years. In Florida, the contract must give at least 60 days' notice before fees change.
Who regulates CCRCs in your parent's state?
Many states have rules just for CCRCs, and the agency in charge differs. A 2010 GAO report, citing a 2009 industry handbook, counted 38 states with some CCRC rules of their own and 12 states plus Washington, D.C., without them. Some states use an insurance or financial department. Others use social services, aging or community affairs.
| State | Who oversees CCRC contracts | One rule worth knowing |
|---|---|---|
| California | Department of Social Services, Continuing Care Contracts Branch | Providers send audited financial statements and reserve reports to the state every year. |
| Florida | The state approves every contract before use; the law sits in the insurance title of the statutes (Chapter 651) | Full refund if the resident cancels within 7 days of signing. |
| Massachusetts | CCRCs file their documents with the Executive Office of Aging & Independence (MGL Chapter 93, Section 76) | The agency posts residency agreements and disclosure statements online. |
| New Jersey | Department of Community Affairs, which issues a Certificate of Authority | 30 days after signing to cancel without penalty. |
| Pennsylvania | Insurance Department, for CCRCs with large upfront entrance fees | A disclosure statement on the community's finances, updated every year. |
A state approval isn't a seal of quality. California says its permission to sell continuing care contracts doesn't mean it endorses the community or guarantees the provider will keep its promises. New Jersey says the same about its certificate.
The care side is licensed too. In California, a CCRC holds a license as a residential care facility for the elderly, and local licensing offices monitor it. For the assisted living rules, see our pages for California, Massachusetts and every other state.
What does the IRS say about CCRC fees?
Part of a CCRC fee can count as a medical expense. IRS Publication 502 covers it under lifetime care and advance payments: "You can include in medical expenses a part of a life-care fee or 'founder's fee' you pay either monthly or as a lump sum under an agreement with a retirement home. The part of the payment you include is the amount properly allocable to medical care."
The same section adds three conditions:
- The agreement must require a specific fee as a condition for the home's promise of lifetime care that includes medical care.
- A statement from the retirement home can prove the amount that goes to medical care. It must be based on the home's past experience or on information from a comparable home.
- Prepaying for care given substantially beyond the end of the year generally doesn't count, except as part of this kind of lifetime care.
The usual limits still apply. Only medical expenses above 7.5% of adjusted gross income count, and only on an itemized return. Ask the community what share of each fee it allocates to medical care, and whether it sends that statement every year. A tax professional decides how it fits your parent's return. The wider rules are in is assisted living tax deductible.
What to check before signing the contract
Get three documents first: the residency agreement for the exact contract type, the latest disclosure statement and the audited financial statements. New Jersey's guide says to review the contract with a lawyer, a financial planner or both.
Questions to bring, and who can answer them:
- Which contract type is this, and which care is included without a higher monthly fee? Ask the community, then have an elder law attorney find it in the contract.
- How much of the entrance fee comes back, when, and from what money? In Florida, some refunds can wait for the next entrance fee paid on a similar unit. Ask the attorney.
- How many days do we have to cancel after signing? It's 7 days in Florida and 30 in New Jersey. The state agency can confirm the rule.
- Who decides when a resident moves to assisted living or nursing, and can the family appeal? The GAO found that not all of the states it reviewed require communities to disclose this. Get the answer in writing.
- What happens if your parent's money runs out? Florida contracts must say when a resident can stay during money trouble.
- Are the financial statements audited, and what reserves does the community keep? An accountant or financial planner can read these.
Words for the first call to the sales office: "Before we put down any deposit, could you send the residency agreement for the contract type we're looking at, the current disclosure statement, and the record of monthly fee increases for the last five years? Our attorney and accountant will read them first."
For the questions any care contract raises, such as move-out terms, use the assisted living contract checklist.
What the move into a CCRC involves
The GAO found that many older Americans sell their homes, often their main asset, to pay CCRC fees. So the house sale, the entrance fee and move-in day have to line up.
- The order of payments. A community still being built may take a reservation deposit first. In New Jersey, that deposit can't be more than 10% of the expected entrance fee and can be refunded at any time. In Florida, a resident who signs but delays the move counts as living there once they pay the entrance fee and start monthly fees.
- Canceling before move-in. In Florida, the entrance fee comes back within 60 days, less a processing fee of up to 5%.
- The house. Ask when the entrance fee is due and whether the community will wait for a sale. The order of steps is in selling the house to pay for assisted living.
- Downsizing. A campus apartment is smaller than a family house. Get the floor plan early, then use the guide to downsizing a parent's home.
Line up the house, the entrance fee and move-in day
Parent Move Plan puts 79 tasks on real dates counted back from move-in day, in 30, 45 or 60-day versions. The Complete plan adds five house clearing tabs and a floor plan grid with a furniture fit calculator for the smaller apartment.
Get your first 3 days freeFrequently asked questions
Is a life plan community the same as a CCRC?
Yes. New Jersey's Department of Community Affairs notes that the industry has been renaming continuing care retirement communities "Life Plan Communities," while New Jersey's laws still use the older name. The contract and the fees work the same way under either name.
Can my parent move into a CCRC if they already need assisted living?
Sometimes. CCRCs generally screen applicants' health and finances, and most residents start in independent living. The GAO found that some CCRCs also admit people directly into their assisted living or nursing units. Ask the admissions office whether that's possible and which contract applies.
What happens to the CCRC entrance fee when a resident dies?
It depends on the contract. In Florida, the contract must state what happens at death and may say the entrance fee is then considered earned by the community. In Pennsylvania, the unearned part of the fee is refunded to a resident who dies or leaves. Ask an elder law attorney to read the refund section before signing.
Are CCRC monthly fees tax deductible?
Part of them can be. IRS Publication 502 lets you include in medical expenses the part of a life-care fee, paid monthly or as a lump sum, that is properly allocable to medical care. The usual 7.5% of adjusted gross income threshold and itemizing still apply, so a tax professional should check the numbers.
What are the pros and cons of a continuing care retirement community?
The GAO says CCRCs let residents move among independent living, assisted living and skilled nursing in one community. The risks it names are monthly fees that rise when a community has money trouble and, in the rare case of a failure, losing all or part of the entrance fee. The contract type decides how much of the care cost risk your parent carries.
Sources
- U.S. GAO: Older Americans, Continuing Care Retirement Communities Can Provide Benefits, but Not Without Some Risk (GAO-10-611) (accessed Nov 2026)
- IRS: Publication 502 (2025), Medical and Dental Expenses (accessed Nov 2026)
- New York Department of Financial Services: About Continuing Care Retirement Communities (accessed Nov 2026)
- Pennsylvania Insurance Department: Help Finding a Continuing Care Retirement Community (accessed Nov 2026)
- California Department of Social Services: Continuing Care Retirement Communities, Frequently Asked Questions (accessed Nov 2026)
- Florida Statutes 651.055 (2025): Continuing care contracts; right to rescind (accessed Nov 2026)
- Massachusetts Executive Office of Aging & Independence: Continuing Care Retirement Communities (accessed Nov 2026)
- New Jersey Department of Community Affairs: Continuing Care Retirement Communities, A Guide Book for the New Jersey Consumer (rev. 2018) (accessed Nov 2026)