Are CCRC refundable entry fee contracts a good deal?

Making the decision to move into a continuing care retirement community (CCRC) means considering a lot of financial options. Many CCRCs require payment of an entry fee. And it’s not uncommon for some communities to offer a refundable entry fee contract in addition to other options.

What’s the best CCRC contract choice?

With so many CCRCs offering refundable entry fee contracts, consumers often ask whether it makes good financial sense to choose a refundable contract compared to other contracts. To help determine which one is the better deal, it’s important to first understand how refundable entry fees work.

At Topeka Presbyterian Manor we offer two options for our independent living apartments and duplexes.

Monthly Accommodation Fee Plan

Our monthly accommodation fee plan has no up-front fees or non-refundable deposits. It simply requires a 30-day notice to vacate the apartment. This plan provides all amenities but without the long-term commitment and the fees are based on the type of residence and services provided.

Entrance Fee Plan (75/25 Plan)

The other available option at Topeka Presbyterian Manor is our entrance fee plan also known as the 75/25 plan. When you choose this option, you pay a deposit for care at the time of your move and agree to a reduced monthly service fee. This plan allows for 75% of your deposit to be refunded to you or your estate when you leave the community (or the time of death), and the residence becomes occupied. The 25% that’s not refunded goes towards the community’s mission to provide quality services. The deposit amount and the reduced monthly service fee are based on the type of residence and services provided.

Additional options at other CCRCs

Other continuing care retirement communities offer a traditional contract with a declining balance. Here’s an example of how that works:

The entry fee for a two-bedroom cottage at ABC Community is $260,000. Under the traditional contract, the community amortizes the entry fee over the first four years of occupancy. If the resident is living in the community after four years, there would be no remaining refund available from that point forward. However, within the first four years, some portion of the entry fee would be refundable in accordance with a declining balance schedule.

What’s the best option for you? That depends on a lot of factors including your estate planning wishes as well as your future care needs.

Click here to read more about our Residency Plan Option and the Benefit of the Deposit for Care.

Summary

If you’re considering moving into a CCRC like Topeka Presbyterian Manor, considering your options carefully. A trusted financial advisor may be able to guide you into making the best decision for you and your family based on your current and future finances.

We can also help guide you towards the right decision by answering all your questions and helping you understand our community’s options better. Contact Danica Loftin with your questions at dloftin@pmma.org.

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The above article was partly written by Brad Breeding of myLifeSite and is legally licensed for use.

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