If you’re planning for a comfortable retirement with a 401K, IRA, and other investments, you may be leaving out a critical area of retirement planning: getting your house ready to age in place. Many people don’t realize (and neither do most financial advisors) that it is much cheaper to outfit your home now for your future needs than it will be to spend a year or two in an assisted living facility or a nursing home.
The Realities of Aging
Losing agility, mobility, eyesight, hearing and other functions as we age isn’t a pleasant prospect, but burying your head in the sand now means tough decisions later that must be made quickly. With proper planning, your home can be made ready now for a variety of situations, giving yourself and your spouse more options, and more time at home as you age.
How One Adverse Event Can Change Everything
Just one fractured hip or a stroke can impair mobility enough to make negotiating stairs impossible. If stairs are the only way in and out of your house, and the only way to your bedroom, it might mean not being able to return home right away, if ever. Ramps, chair lifts for stairs, first floor master bedroom suites, tub cuts, replacement windows, wider doorways and walkways, better flooring and lighting — all of these improvements ensure your home will be safe and comfortable for you as you age. And, believe it or not, making all of those renovations now ends up costing just a fraction of what it would cost if you spent a few years in a nursing home or an assisted living facility.
Typical Long-Term Care Costs
Type of Care
Nursing Home (Private Room)
[ 5 ] Year(s)
2014 cost: $ 87,600
2018 cost: $ 110,593
Total cost for all years: $ 493,809
2014 cost: $ 100,010
2018 cost: $ 121,563
Total cost for all years: $ 552,618
Assisted Living (Private Room)
[ 5 ] Year(s)
2014 cost: $ 45,720
2018 cost: $ 71,941
Total cost for all years: $ 290,452
2014 cost: $ 36,600
2018 cost: $ 42,817
Total cost for all years: $ 198,237
An Essential Retirement Strategy
Lew Mandell, the author of “What To Do When I Get Stupid: A Radically Safe Approach to a Difficult Financial Era,” says that few people planning for retirement (or their advisers) recognize all of the financial reasons why it is essential to live in an age-in-place home and why that home should ideally be owned free and clear. “These reasons are so compelling that virtually all of my retired friends (who have read my book) are now trying to buy age-in-place homes or to modify their existing homes to enable them to age-in-place,” writes Mr. Mandell.
An AARP survey found that more than 80 percent of us want to stay in our homes as we grow old. And it’s no wonder. Owning a home that’s been modified for aging-in-place offers many benefits. You can plan to live out your golden years in a comfortable environment, surrounded by familiar friends, stores, restaurants, doctors, places of worship and perhaps relatives.
Economic Advantages to Aging in Place
Aging in place offers some sound economic advantages, too. Aging in a home you own, and not having to pay rent, equals implicit income. Since you already own your home, you don’t need to be earning as much to pay for housing like you did when you were younger. Another economic advantage of owning an age-in-place home is that it is a safe hedge against inflation. If you are old enough to remember the double-digit inflation of the late 70s and early 80s, you can imagine how a similar event could mean skyrocketing rental rates. A third benefit we’ve already discussed is being able to avoid expensive long-term care and assisted living costs for much, much longer with a home that allows you to age in place.
Thinking about where (and how) you’re going to live as you age is an often-neglected part of people’s financial plans for the future. But being realistic about what your needs will be as you age, and making changes to your home to accommodate those needs, makes just as much financial sense as contributing to an IRA. The longer you can remain in your own home, the better. Plus, you’re happier, more independent and saving more of your investment for your heirs.