Retirement Living Options
When it comes to retirement living options, the question of whether to stay at home (aging in place) or to move to a retirement community often looms large.
Here are the things to consider so you make the right decision.
Aging in the Right Place
Most of us want to age in the place we call home, whether that is a home that we own or a rented apartment. And for some people that is the right choice. But for others, it makes more sense to move at some point into one of a variety of alternate living arrangements, whether it be a retirement community, cohousing, or some other type of senior living setting.
Too often, I have seen people wait until the last minute, after some life altering event has taken place, to start thinking about the big question: "Should I move or should I stay" (1). The trouble is, that after that broken hip or stroke, or death of a spouse, one is rarely in the right frame of mind for considered analysis, and so the decision tends to be rushed and less well thought out than would be ideal.
This article is to help start the thinking process a bit earlier. While you have time for reflection, and are not in a rush.
If there is one key message from this article, it is the following. To best decide on whether to remain at home or to move to another setting for your later years, consider not only the needs you have today, but also those you may have in the future.
Aging "in Place" at Home: The Basics
Here are the first things to focus on to make aging at home a success.
- Houses or apartments can be modified with ramps for better access, reachable cabinets and outlets, enhanced lighting and other elements of universal design.
- In addition, a home can be made more affordable by arranging to share with one or more other independent seniors who share the cost of living with a homeowner.
- When indicated, help at home can be arranged for safety and support.
- Increasingly the introduction of technology is becoming more affordable than labor, with ever increasing demand driven by the prelude to the first of seventy million ‘Boomers’ now starting to join the 65+ club. (2)
Adequate finances are key to aging in place at home
Equity or assets are needed to cover the cost of necessary home modifications and services, and increasingly, older adults are seeking to augment regular sources of monthly income.
Here are some relevant financial options.
One approach to funding aging in place at home is through a reverse mortgage, although there are a number of questions to ask before proceeding. According to the Consumer Finance Protection Bureau (CFPB), many borrowers do not understand the reverse mortgages they take out, so bear in mind these cautions from Reverse Mortgage Alert (3) before signing a reverse mortgage:
- The earlier a borrower takes out a reverse mortgage, the riskier the decision can become. This problem arises primarily from borrowers who take out a large lump sum at closing and find themselves without any equity remaining later in life.
- Many seniors invest lump sum payments at interest rates that are lower than the terms of the reverse mortgage.
- When a reverse mortgage is due, the borrower has 6 months to repay. This fact can affect individuals living in a home that are not named on the reverse mortgage. Reverse mortgages have made the news because spouses who were not named on the loan were forced to move when the borrowing spouse passed away.
- The 10% delinquency rate on reverse mortgages is far higher than the rate of delinquency on standard mortgages. That said, it is unclear how many borrowers have faced foreclosure.
Shared housing as a financial solution
Shared Housing can lighten the financial load for a homeowner. One example is finding a paying home-sharing partner through a commercial website such as Golden Girls (4) network (it is a way to find shared housing, like ride sharing for commuters). Here are some criteria used to match housemates using a nationwide database:
- Common interests and compatible goals
- Single mature women and men who love the idea of living with others in an economical lifestyle
Shared housing is promoted in three financial models:
- Share and manage equally, either through shared ownership or equally sharing a lease;
- A landlord/tenant arrangement where one person owns the home and others are roommates; or
- A homeowner and a live-in home companion, where one person provides some household assistance and companionship for an older adult.
Additional factors that enhance aging in place at home
- Good social connections
- Easily accessible transportation
- Long Term Care Insurance (5)
- Ability to reach out for help when it is needed
- A safe neighborhood
Resources that Help Aging in Place at Home
The Village movement (6) is a non-profit network of elders over 60 who are realistic about the transitions that come with getting older and are committed to remaining in their homes and neighborhoods and helping each other when there’s a need. The Village arranges for volunteer or vendor services, and ongoing connection to friends in the neighborhood.
Over ten years ago, neighbors in Boston’s Beacon Hill neighborhood met together to discuss aging in place. Realizing that, in general, the indigent would be taken care of by government subsidy and that the wealthy can provide for themselves, they were concerned about their middle class futures. Hence, they formed the prototype of what is now over 120 villages with 200 more in formation.
NORCs: Naturally Occurring Retirement Communities
NORC is the widely used term that is short for Naturally Occurring Retirement Community — a community that was not originally built for seniors, but that now is home to a significant proportion of older residents. A NORC may be a building, or an entire neighborhood.
Never in the history of this country have so many communities been NORCs. Since the American population is aging, those numbers seem likely to increase over the next 20 years.
Programs and service packages are being developed to serve those in this population. (7)
Adult Day Care
Adult day programs provide respite care to enable a well spouse or an adult child to rest or recreate while their loved one is in a secure environment. (8)
Home Health or Companion Services
Home health services are commonly available in most communities from commercial as well as non-profit organizations. Note that the cost of in-home services can exceed that of moving to a care facility, depending on degree of need.
PERS or Home Monitoring Sensor Systems
Personal Emergency Response Systems and home monitoring sensor systems help older adults remain safely in their homes, and their family and friends worry less about them. They can consist of a telephone, pendant or base station to summon emergency help, or may be a more sophisticated system consisting of an array of passive sensors combined with an interactive or emergency call capability. (9)
Moving from the Homestead: The First Step - Independent Living
For some people, there comes a time when the bother of taking care of the house maintenance, getting the groceries up the stairs, and dealing with the day to day administrative overhead of living in their long-time home becomes too much trouble, and they decide they want to try a retirement living alternative that suits their current needs better.
Caution: It can be especially daunting for those accustomed to living under rent control in a house or apartment (even if they have other assets) to cope with the increased monthly cash needs after leaving the rent-controlled environment. It is prudent to seek the advice of a financial counselor before making this move.
Here are some resources and things to consider, if you are leaning toward these "down sized" retirement living options.
Senior Move Managers
Certified Senior Move Managers specialize in helping older adults successfully prepare and accomplish household moves. Often, a move manager is the key to action when otherwise the very idea of sorting, packing and moving decades of accumulated possessions can stop the process. (10)
Condo Living - Downsizing (Right sizing)
Many older adults are living in only a few of the rooms in their homes, and storing decades of collected treasures in the unused rooms. Right sizing means leaving maintenance behind; choosing the items that mean the most, getting rid of the rest, then moving to a space that makes more sense.
Market Rate Rentals
Market Rate rentals are similar to moving to a condo, renting at prevailing market prices, but without the ownership aspect – and responsibilities! Renters can call their landlord when something needs repair.
Finding Affordable Housing for Older Adults with Low Incomes
Subsidized or affordable housing is available through governmental or charitable sources in most communities, but the demand is so great that waiting lists may open to new seekers only every five to seven years. Hence, it is most important to sign onto an open list early and expect to wait for quite some time before being called to actually file an application. HUD has a website to aid in the search. (11)
This is a slow-growing trend which was started in Denmark. This movement of creating intentional communities is increasing in popularity due to offering equity conservation and integrated design elements to make the living environment more accessible and convenient for older adults.
In addition, certain communal design features from assisted living such as meal preparation and dining space and activities space are included. These are chosen usually by people in their 60’s planning ahead, because developers have to find land, like-minded people, an architect, and permits. The development path can take years. In some cases, it is possible to buy into an existing cohousing community.
There are very few month-to-month properties specific to people 65 years and older. If finances are a problem, there may be subsidized senior rental waitlists in your community. (12)
Reasons for choosing a senior rental property include relief from home ownership burdens, no upfront fees, and new companionship.
Rent usually includes one or more meals, housekeeping, and activities. Some offer assisted living services for an extra fee.
The ‘Over 50’ Planned Adult Community
This type of retirement community typically offers upscale housing, often with hotel services and amenities.
But they can be deceptively attractive, since medical and wellness services require you to have the resources (cash or long term care insurance) to afford your own health care providers when you need them.
Some are eye-catching affinity group communities: for artists, golfers, retired military, postal workers, RV owners, faith groups, Zen-inspired - and more.
Continuing Care Retirement Communities
Today, aging adults look forward to living independently longer than previous generations, but we also worry about whether our assets and retirement income will cover the cost of care we may require in our later years.
CCRCs provide a growing population of America’s seniors with a convenient range of housing, supportive services, health care options and the ability to age in place.
Many CCRCs require fairly large entrance fees (most in the low to mid six-figure range) and additional monthly payments. The fees cover housing costs and a range of care and services, including assisted living and skilled nursing.
In addition, residents can choose a meal plan, use a variety of on-site amenities and activities, and receive additional care which can be paid for out-of-pocket or have covered by insurance. (13)
Moving to a Care Facility: Assisted Living, Memory Support or Skilled Nursing
When a person needs substantial help with the activities of daily living and/or requires 24-hour supervision for personal safety, a move to a Board and Care, Assisted Living, or Memory Support facility should be considered as the cost of in-home care escalates.
Someone with a condition that requires the attention of a licensed nurse on a daily basis may expect their physician to write an order for admission to a Skilled Nursing center.
Help with Choosing the Right Care Facility
Consult a Certified Geriatric Care Manager and a Certified Financial Planner for a thorough assessment of personal needs, facility referrals, and advice on payment options.
Comparing the Options for a new "Home"
There are a variety of housing ‘business model’ options for a person living independently at home to consider when weighing whether to stay or move, as described above. They vary from staying put and joining a village for companionship and support services to purchasing a place and moving into a setting that allows for preservation of your home equity.
As an illustration of how to review the options and the frequently asked questions about each, two of our Explorers (John Milford and Candiece Milford) have put together this comparison table, using San Francisco Bay Area Housing examples.
Talk on Retirement living & Comparison Matrix
Listen to a talk on Retirement Living Options (by John Milford), and view the Comparison Matrix.
In Summary: Plan Ahead
Plan ahead now for what you may need in the future, but beware of the human propensity called Life Stage Denial (“I’m 76, but I feel like I’m 35, so what’s the rush?). Keep in mind that the longer a person waits to address life’s changes, the fewer the housing options remaining open. It also helps to bear in mind that everything changes, all the time. We can’t avoid it, so we must learn how to anticipate it.
For example, most retirement communities seek to admit people in good health for their age, and have medical component to the application. Waiting invites an event like a stroke or early onset of dementia which would be a disqualifier in most communities. This can be especially hard on couples who had planned to move together.
Life Stage Denial tends to suspend the decision making process, and may force premature default to a care facility. Although most of us prefer to stay at home, unless we plan ahead realistically, over the years it can lead to isolation, and oddly, we may find ourselves more dependent than independent.
Darwin said it best, “Those who adapt survive.” And before Charles, Benjamin Franklin warned that “Failing to plan is planning to fail.” Remember that aging in place works best when we have planned to age in the right place.
9. Caring from Afar: A Guide to Home Sensor Systems for Aging Parents (Aging in Place Technology Book 1) Kindle Edition by Richard Caro (Author), Mary Hulme (Author)
12. A Guide for Making Housing Decisions: Eldercare Locator http://www.eldercare.gov/eldercare.net/public/Resources/Brochures/docs/Housing_Options_Booklet.pdf
13.Yee-Melichar, et.al., Long-Term Care Administration and Management, Chapter 5, p.91. (2014) New York: Springer Publishing.
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