“I would consider a retirement community, but I cannot afford it. Besides, I own my house free and clear.”
I hear this explanation, but I often ask families if they have calculated the cost of care and housing in detail. Many assume living in their home with home care is less expensive. Consider the following questions:
1. How much does it cost to live in my home? It’s important to include taxes, meals, utilities, car costs, insurance, etc. I also recommend calculating annual home repair costs at 1% of the value of your home. Living in a senior community eliminates most, if not all, of these costs.
2. How much does home care cost when I need 12-to-24-hour care every day? Some of us may underestimate, or even deny, that we will need care someday. Seventy percent (70%) of older adults will need care for 2–5 years. In the DC metro area, caregivers cost about $22 per hour. That adds up to over $15,000 a month for 24-hour home care. Now add that to your monthly living expenses from above.
3. Have you considered alternatives to a “buy-in” community? Many people assume there are only buy-in retirement community options. However, there are rental options that do not require a large buy-in (e.g., $300,000). When learning about any retirement community or assisted living facility, keep in mind how much care is offered and what the contract covers.
4. Would you consider a smaller apartment and/or a different location if it meant an overall lower monthly cost? If you are willing to make compromises, you may find the perfect place with lower costs. Would you consider a one-bedroom apartment vs. a two-bedroom one? Would you consider moving out of state to be near family if it meant your monthly expenses would be lower in a retirement community?
5. Have you discussed financial planning with the help of a professional who can calculate the potential scenarios and associated risks? What expectations do you have for children to contribute (or to not contribute) to your care and housing?
6. And last, what is your REAL reason for not learning more about senior living options? Most of us have difficulty imagining the day when we can no long dress, bathe or go to the bathroom by ourselves. Many people are anticipating dying earlier than they actually will. Ask yourself, “What kinds of emotions arise when I think about needing help one day?”
Retirement communities, assisted living, etc. are not for everyone. Many of the options are driven by finances and sometimes there is no perfect solution. If someone is 75 and has not thoroughly investigated facets of senior housing and care while they are still healthy, then it’s time to become educated and have the conversation.