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Note: The examples and case studies in this article are hypothetical but represent real situations I have encountered in my practice working with Washington State public employees. Most retirement conversations start the same way. When should I take Social Security? How much can I withdraw each year? Should I do Roth conversions? Those are all real questions worth answering. But there's a conversation that almost never comes up until it's too late. Where are you going to live when you're in your 80s? And who's going to take care of you if your health changes? I've started thinking about this more carefully lately, not because it's an exciting topic, but because I've seen what happens when people don't think about it at all. "We'll Just Stay in the House" Take a hypothetical couple I'll call Karen and Tom. Karen is a PERS 2 member with the county, 27 years of service, planning to retire at 58. Tom is a few years older and already retired. They've done everything right. Good pension. Solid DCP balance. Low debt. Their plan for later life? "We'll just stay in the house." That's not a plan. That's an assumption. The house doesn't adapt when Karen can't manage the stairs. It doesn't provide memory care if Tom's cognition declines. It doesn't coordinate doctor visits or medication management. And when something goes wrong, it typically falls on one spouse, then adult children, to scramble for answers under pressure. This is one of the most common patterns I observe working with public employees in retirement. The financial side is often well thought out. The housing and care side is often not thought out at all. The Four Main Options Most people don't realize how many choices actually exist. When you start looking at later-life housing, four main paths emerge. The first is aging in place, staying in your current home with modifications and outside support as needed. This works well for some people, but it requires a lot of coordination and can become costly as care needs grow. The second is moving in with family. For some, this is meaningful and works beautifully. For others, it places a significant burden on adult children and carries real risks if the family situation changes. The third is moving to an assisted living facility or a standalone memory care community when needs arise. The challenge here is that these moves often happen reactively, in a moment of crisis, which limits your options and your control. The fourth, and the one most people haven't fully considered, is a Continuing Care Retirement Community, or CCRC. These are also called Life Plan Communities. There are roughly 1,900 of them across the country, including several here in Washington State.¹ What Makes a CCRC Different The basic idea is that you move in while you're still healthy and independent. The community then provides care across a continuum, from independent living to assisted living to skilled nursing to memory care, all on the same campus. You don't have to move every time your needs change. That's the defining advantage.¹ CCRCs typically require an entrance fee and a monthly fee. The fees vary significantly by community, contract type, and location. This is one of the more complex financial decisions in retirement planning, which is why starting the research early matters. Some of the better communities have waiting lists measured in years.³ The Four Risks You're Actually Managing When I think about later-life housing, I think about four categories of risk. The first is care risk. If your health changes, will you have access to the care you need, when you need it? The second is financial risk. Long-term care is expensive. Around 70% of people who reach age 65 will need some form of it during their lifetime.⁴ The costs have been rising steadily across all care settings.⁴ The third is coordination risk. When someone moves into a crisis, managing care across multiple providers, facilities, and family members is enormously hard. Communities that handle care transitions internally reduce this burden significantly. The fourth is emotional risk. Decisions made in a hospital hallway at 2 a.m. are rarely the decisions you would have made with time and clarity. Planning now gives you and your family that clarity. The Tax Angle Most People Miss If you move into a CCRC, a portion of both the entrance fee and the ongoing monthly fees may be deductible as a medical expense on your federal income tax return. The IRS has addressed this in several rulings going back decades.⁵ The basic principle is that if the CCRC can demonstrate what portion of your fees goes toward providing medical care, that portion qualifies as a deductible medical expense under Section 213 of the tax code. For most people, the medical expense deduction threshold is hard to clear. But CCRC fees can be large enough that it becomes relevant, especially in the year you enter. This is worth discussing with a CPA or financial advisor before you sign anything. If a refund of the entrance fee is later received, a portion of that refund may need to be reported as income.⁵ The mechanics matter, and they're not always explained clearly by the community's sales team. When to Start Thinking About This Most financial planners treat this as a problem for your late 70s. I'd push back on that. The research, waitlists, and financial planning associated with a CCRC can take years.³ And your health status at the time of application will matter. The sooner you start learning, the more options you'll have. For Washington State public employees nearing retirement, this isn't an immediate action item. But it belongs in the retirement planning conversation now, not as an afterthought a decade later. The pension provides a reliable income floor, which is actually a meaningful advantage when it comes to CCRC financial planning. Many communities conduct a financial review as part of the admission process. Having a predictable monthly income alongside portfolio assets is exactly the kind of stability they're looking for. A Few Starting Points If this is a conversation you want to have, here's where I'd suggest beginning. Start by discussing it with your spouse or partner, separately from any financial pressure. What does each of you actually want? What are you afraid of? Write it down. Then do some general research. Resources like myLifeSite³ offer educational tools specifically for people navigating CCRC decisions. Newsweek also publishes an annual ranking of top communities.² And if you're a PERS, TRS, or LEOFF member working through retirement income planning, bring this topic into those conversations. Your pension, DCP balance, and portfolio together tell the full picture of what's financially realistic. Because "we'll stay in the house" deserves more than a passing nod. It deserves an actual plan. Sources
-Seth Deal
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AuthorsBob Deal is a CPA with over 30 years of experience and been a financial planner for 25 years. Archives
June 2026
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