A continuing care retirement community (CCRC, also called a life plan community) is a unique type of retirement community that provides its residents with contractual access to a full continuum of care services, should they be needed in the future. In addition to the monthly service fee, CCRCs often require new residents to pay an entry fee.
What is a CCRC entry fee?
A CCRC entry fee is a one-time fee, typically due upon a new resident’s move-in. It is often in the six-figure range, averaging in excess of $480,000 on a national basis in 2025, according to data from the National Investment Center for Seniors Housing & Care. Entry fee amounts can vary dramatically from one region to another, however, as well as based on the type of CCRC contract offered by the community.
There are two basic types of entry fee contracts:
- A traditional declining balance entry fee contract are refundable on a declining basis over the first few years of a resident’s occupancy. After that period of time, there is no remaining entry fee refund.
- A refundable entry fee contract declines in the same way as a traditional contract but never goes below a certain point. Common refundable entry fee amounts are 50%, 75%, or 90%, and are typically payable to the resident’s heirs, or to the resident if they ever move out, no matter how many years the resident lived in the community.
The stipulations for receiving a refund can vary from one community to another, so it is important to read and understand your specific CCRC’s contract details.
>> Learn more about refundable CCRC contracts
Which CCRC entry fee refund option is best financially?
If choosing between multiple types of refundable CCRC contracts, a prospective resident may wonder which choice is best financially over the long run. The overriding questions:
- Does it make sense to pay a higher entry fee today in exchange for receiving a significant portion of the entry fee back later?
- Or is it better to pay a lower entry fee today, thus keeping more money in your pocket, but not getting anything back in the future (that is, if you remain in the community for longer than the amortization period, which is typically two to four years)?
There is no uniform answer to this question because different CCRC providers price their contracts differently. Furthermore, the choice a person makes could ultimately be based as much on the psychology around the decision as it is on the financial implications. There are some who simply cannot come to grips with the idea of paying a substantial entry fee and not getting some of it back later, regardless of what the numbers may reveal.
>> Related: CCRC Entry Fee Refunds Explained
Illustrating differing entry fee refund trade-offs
To help provide a better understanding of how various entry fee contract choices might look, we created sample scenarios for a hypothetical couple (ages 78 and 79) using specific pricing numbers for a CCRC that offers a lifecare contract using each of the following entry fee choices:
- Traditional declining balance entry fee contract
- 75% refundable entry fee contract
- 90% refundable entry fee contract
Except for the pricing figures associated with each of the above three options, we left all other data inputs and assumptions exactly the same across all scenarios.
The following graph illustrates the projected ending balance of the hypothetical couple’s savings and assets at the end of 12 years (approximate life expectancy) plus any applicable entry fee refund:
Note: “Savings,” as shown on the above graph, represents the total value of the couple’s savings and assets.
As you can see from the graph, the two refundable contracts come out almost exactly the same if you combine the couple’s savings with the amount of the refundable entry fee, and both produce a higher total number than the traditional declining balance contract.
However, with the 75% refundable contract, the couple is projected to have almost 50% more in their own pocket after 12 years than they would under the 90% refundable contract. Clearly, the 75% refundable contract would be a much better choice between the refundable contract options in this particular scenario.
Interestingly, in this hypothetical, the declining balance option is the best choice if you only take into consideration the amount of money the couple still holds in their own personal accounts.
>> Related: Where ‘Financially Qualified’ Meets ‘Financial Confidence’ in a Retirement Community Move
The impact of higher rates of return
After seeing the above results, let’s test a few different scenarios. First, what would it look like if the couple were to earn an average of 6% interest on their money instead of just 3% (as we used in the previous scenario)? (Note: As of Dec. 31, 2025, Morningstar projected an average of 5.3% 10-year nominal returns for U.S. stocks and 4.5% for U.S. aggregate bonds, so if their forecasts prove to be accurate, a 6% return would be above average.) The following graph illustrates the outcomes:
In this hypothetical scenario, the traditional declining balance entry fee contract would give the couple almost 50% more in savings and assets at the end of 12 years when using a 6% rate of return compared to a 3% rate of return. Furthermore, the spread between the declining balance contract and the 75% refundable contract is about 50% smaller in this scenario.
In other words, for this example, as the couple earns more interest on their own money, the two refundable contracts become less attractive because CCRCs very rarely pay interest on entry fee refunds.
>> Related: Is A Retirement Community Entry Fee Tax Deductible?
The impact of lower rates of return
So, what about the opposite situation? What would it look like if the couple earned a lower-than-average rate of return on their money — let’s say 1%? Here’s how that would look:
In this hypothetical situation, you can see that the two refundable contracts have a much greater impact in terms of total dollars when a lower rate of return is used. The 90% refundable contract now shows a slightly higher end-result total than the 75% refundable contract, but the couple holds substantially less in their own savings account.
The biggest difference between these lower rate of return outcomes and the previous higher interest rate ones is that the total numbers for the two refundable contracts are substantially higher compared to the declining balance contract than in the previous two graphs. For instance, the 90% refundable contract in this scenario shows a total that is almost 50% higher than what the couple is projected to hold in their own savings account at the end of 12 years.
>> Related: CCRC Entry Fee Refunds: What Happens When a Resident Passes Away?
Selecting the CCRC entry fee contract that is right for you
Again, all of these hypothetical scenarios are based on the pricing for a single CCRC provider with an all-inclusive lifecare contract and therefore may not be representative of the outcomes you find using the pricing for another CCRC provider or under a fee-for-service contract.
But as you can see from these examples, aside from the psychological aspects of this financial decision, the key determining factor when choosing which entry fee contract is preferable is the growth rate. (Note: Another major factor is timeframe; the shorter the timeframe, the better a refundable entry fee will normally look.)
It is clear from these particular scenarios that the higher the rate of return on the couple’s own savings, the more favorable the traditional declining balance contract looks compared to the refundable contracts.
Yet, when you add this couple’s savings/assets to their entry fee refund, there is not a single scenario in which the couple does better by choosing the lower-cost traditional declining balance contract and keeping the difference in savings, even when using an ambitious 6% year-over-year return.
Therefore, in these particular hypothetical situations, the idea that a CCRC resident can “keep the difference and do better with my own money” does not prove to be true when you add the refundable entry fees back on top.
The difference, of course, is that the money received from an entry fee refund is not in one’s possession until such time as it is received — either upon move-out or in a payment to a resident’s heirs (which is also why you should take into account a community’s financial viability). This is a very important consideration when choosing which type of CCRC contract is right for you and your unique needs.
Originally published September 2, 2016; updated June 15, 2026
