Aging in Place: Financial Considerations

Louis Butera |
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“Home is where the heart is” for American retirees. According to a recent AARP Research Center Study, 87% of American seniors would prefer to live out their golden years at home.1

While some seniors look forward to moving to a retirement community for the ease and social activities, an increasing number of older adults are opting to stay in their current home as they age.  In addition to personal preference, there are financial considerations to evaluate when making this important choice for your retirement years.

As with all of life’s transitions, preparation and financial planning are key to a successful and comfortable outcome for either aging in place or community living.  It’s often assumed that the cost of assisted community living will be higher than living at home. That may be true for some, but it’s not always the case.  Butera Wealth Management (BWM) professionals recommend taking a closer look at what the actual costs of aging in place safely and comfortably may be for your unique situation. Your household and healthcare needs later in life may be different than they are now, and having those needs met at home does come with a price.

Costs and Benefits

While the benefits of aging in place range from staying near family and friends, comfort, independence, and even slowing memory loss,2 the hidden costs of aging in place can reduce the expected economic benefit relative to the price of relocating to an assisted living community.

To explore this further, let’s consider that additional housekeeping, lawn maintenance and transportation costs may rise as many seniors require help with some daily tasks. Interior remodeling can make things safer and more comfortable at home.  New finishes can add both safety and style to your residence, but basic home modifications like installing better lighting and adding handrails can cost up to $10,000. More extensive modifications such remodeling bathrooms and kitchens or widening doorways can add up to $100,000 or more.3

Assistive technology is a great option for seniors at home. Passive and smart devices are available for preventing kitchen and bathroom mishaps such as overflowing bathtubs, and (PERS) personal emergency response systems are wearable devices to call for assistance.  A smart speaker like the Amazon Echo can remind seniors to take their medication and enable them to turn on the lights before entering a next room. The cost of these devices varies. Some will require one-time purchase and installation fees and others require ongoing monthly payments. 

When choosing to age in place it is essential to financially prepare for the possibility of needing part- time or full-time home health care. The national average for in-home assistance, according to a survey conducted by Genworth Financial, comes to around $4,000 per month.4

Planning for the Future

Older adults who have elected to age in place often have concerns about adding financial or emotional stress to any family members who may need to provide them with assistance as time goes on.  Preparation for ease of personal money management is another imperative for seniors.  Gearing up a for future needs may include setting up automatic bill payments and designating a trusted fiduciary to manage monthly finances. BWM provides tools and checklists that can help streamline this process

We can also help you to develop and implement comprehensive strategic plan to meet your personal retirement goals, including retirement income, living expenses, healthcare, insurance and financial administration. With all the relevant information for your situation, you can make decisions about your retirement plans with confidence. Our forward-thinking process integrates every aspect of your financial life and anticipates future needs, and includes periodic review and updates to reflect how your life and needs change over time.

Binette, Joanne and Kerri Vasold. 2018 Home and Community Preferences: A National Survey of Adults Age 18-Plus. Washington, DC: AARP Research, August 2018.

Five Benefits of Aging in Place”, RetirementLiving, July 16, 2019

Reasons Why Aging in Place May Not Be Cheaper, myLifeSite.net, 8/15/16

https://www.genworth.com/aging-and-you/finances/cost-of-care.html