Disclaimer: The following article is intended to provide general information only. Tax laws are subject to change, and individual circumstances may vary widely. Always consult with a qualified professional regarding your specific situation before making decisions based on this information.
Key Takeaways:
- Continuing Care Retirement Communities (CCRCs) allow seniors to age in one place, with access to increasing levels of care — from independent living to skilled nursing — as their needs change.
- There are three main CCRC contract types (Type A, B, and C), each offering different levels of coverage, entrance fees, and potential tax deductions.
- CCRC entrance fees and monthly fees may qualify as deductible medical expenses under IRS rules, as long as total medical expenses exceed 7.5% of adjusted gross income.
- Type A (LifeCare) CCRC contracts offer the most comprehensive coverage and the largest potential tax deduction—The Farms at Bailey Station is a Type A community.
When you realize that a loved one may need senior living, assisted living, or memory care, you may feel overwhelmed by questions.
What kind of care do they need? What type of community is best for them—now and in the future? And the biggest and most important question: can I afford it?
Continuing care retirement communities (CCRCs), such as The Farms at Bailey Station in Collierville, TN, can help ease your concerns by offering the answers to these questions. In addition, some fees may be tax-deductible as prepaid medical expenses, offering significant savings for Tennessee seniors.
Here’s a look at how a continuing care retirement community can provide you and your family with a solid foundation for long-term care and potential savings on senior living costs.
What Is a CCRC?
With more than 85% of seniors planning to age in place, the vast majority of families today are looking for senior living options that allow their loved ones to maintain their freedom and independence for as long as possible.
We all want to respect our loved ones’ wishes and help them live the life they want as they age. However, the reality is that 70% of adults over age 65 will likely have a need for long-term services and supports at some point in their lives, and 20% will need that level of care for more than five years, according to the Department of Health and Human Services.
Even if your loved one seems perfectly healthy now, it’s impossible to predict what their care needs will be over time. That’s where continuing care retirement communities come in. CCRCs enable seniors to remain independent for as long as possible and age in one place, increasing their level of care as needed.
The Farms at Bailey Station offers Memphis-area families all the benefits of maintenance-free senior living along with guaranteed, priority access to assisted living, memory care, skilled nursing, and rehabilitation. The Jordan River Health Campus at The Farms has a comprehensive suite of healthcare and rehabilitation services, including a 4,300 sq. ft. therapy center where residents can receive physical, occupational, and speech therapy.
With a continuing care retirement community, seniors and their families can take comfort in knowing they can live their best life today and have a solid care plan for their future. For example, if your loved one moves into an independent living apartment but eventually needs help with daily tasks, they can simply relocate to assisted living within the same community.
For both seniors and their families, CCRCs offer additional stability, familiarity, and convenience, no matter what happens down the road.
What Are the CCRC Contract Types?
Many CCRCs, including The Farms at Bailey Station, are also LifeCare communities. However, it is important to note that although all LifeCare communities are considered CCRCs, the contracts offered vary in coverage.
There are three main CCRC contract types with varying levels of entrance and monthly fees. In senior living communities, an entrance fee is a one-time upfront payment to secure your place in the community and access to future healthcare services. Most communities also charge a monthly fee that supports ongoing maintenance, housing, amenities, and services. Let’s take a deeper look at how each type affects senior living costs.
Type A: Extensive/LifeCare Contract
- Offers the most comprehensive coverage of all CCRC contract types.
- All-inclusive: covers housing, services, and healthcare at no additional cost.
- Typically charges the highest entrance fees, but offers the largest tax deduction.
The Farms at Bailey Station is a LifeCare contract community.
Type B: Modified Contract
- Offers a more limited set of services.
- Additional services are charged at a monthly rate.
- Typically considered mid-range level of entrance fees, and a partial tax deduction applies.
Type C: Fee-for-Service Contract
- Healthcare services are billed at a market rate when needed.
- Has the lowest entrance fee of all CCRC contract types, but the smallest tax deduction.
Additionally, some communities offer rental contracts similar to an apartment complex, as well as equity agreements to purchase a share of your housing unit.
In general, the key difference between CCRC contract types is that the more healthcare coverage that is offered, the greater the potential tax deductions.
Given these different options available, be sure to review the details of the contract and what is being offered at each community. You may also want to consult with a lawyer to review the best option for your specific situation.
What Are the Advantages of a Type A CCRC Contract?
Each family’s financial situation is different, which is why there are flexible contract options depending on the senior living community you choose.
With a Type A contract, your healthcare costs are locked in. Even if you don’t anticipate your loved one will need additional care, Type A contracts provide unlimited access to whatever services you may need without paying the market rate at that time.
The Farms’ Jordan River Health Campus has all levels of care available in one place, which means couples can stay together in the same residence even if their needs vary.
What CCRC Tax Benefits Are Available?
A CCRC contract includes healthcare coverage for future needs. Because of this, they may be considered qualified medical expenses under IRS rules, which makes them eligible for a tax deduction.
Per the IRS website, you may be able to deduct medical and dental expenses you paid for yourself or your spouse during the taxable year, as long as these expenses exceed 7.5% of your adjusted gross income. This deduction applies only to costs not covered by insurance or compensated otherwise.
The exact percentage of CCRC tax benefits you may receive varies between senior living communities. The Farms at Bailey Station offers multiple LifeCare contract options, some of which are up to 90% refundable depending on which option you choose. Additionally, your entrance fee may function as part of your estate plan, allowing you to pass on a significant portion to your family.
Choosing the Right CCRC Contract Type for You and Your Family
Talking with your loved ones about a possible move to a senior living community is one of the most emotionally charged decisions either of you will make in your lifetime.
While these conversations are difficult, it’s important to have the conversation early, before the need for care is urgent. More than 75% of families who have completed their search for senior living say they wish they had started earlier.
For Memphis-area families, The Farms at Bailey Station makes the search simple, because everything your loved ones need is right here. We offer personalized support for assisted living, allowing seniors to maintain their independence and dignity.
For seniors who need Alzheimer’s or dementia care, our memory support team offers specialized, compassionate care. We also offer 24/7 skilled nursing care, rehabilitation, and short-term respite care.
As a Type A CCRC community, The Farms takes the burden and the worry out of senior living. Your loved ones are taken care of, and whatever their needs may be in the future, all the questions are already answered. Costs of care will likely continue to rise, but your senior living costs will remain steady and predictable.
While we hope this guide answered many of your questions, we know that each person and each family is unique. We’re here to help you at every stage of the senior living journey.
Disclaimer: The information contained in this article is intended for information purposes only. Please consult financial professionals, tax professionals, and/or legal counsel to determine what options are best for you based on your individual circumstances.
Additional Resources:
- Download our LifeCare Q&A guide here
- Schedule a tour today to experience The Farms at Bailey Station and our Jordan River Health Campus



