A harsh reality of getting older is the potential that physical and mental limitations can impact individuals’ quality of life and their ability to continue living independently. When individuals fail to plan in advance for these possibilities, decision-making may fall to their adult children who may not have a grasp of their parents’ emotional ties to a family home or the availability of funds that will be required to age in place or move. As the costs for long-term care continue to rise, families should consider planning early to meet the wishes and needs of aging family members and the financial costs of a variety of living arrangements.
Home is indeed where the heart is and where most individuals feel most comfortable. Many social service agencies provide elderly homeowners with free transportation and meal delivery services as well as social activities. However, this sense of familiarity and normalcy may become unsafe and lonely. It may also require significant costs to maintain the home and provide one-on-one nursing care for the homeowner. Alternatively, a family member may decide to take aging parents to live in his or her home or personally provide care for parents who remain in the primary homes. These options should be considered very carefully, as they will require a significant investment of time, money and resources to achieve a healthy balance of physical and mental well-being for all parties.
Across the nation, there has been a boom in the development of communities targeted to individuals who have reached a particular age. These projects provide residents with the privacy of often spacious individual homes along with the offering of a range of services and activities to help residents stay active and connected with others. In addition to the initial purchase price of a home, residents are responsible for paying for the upkeep of and repairs to their individual units. Oftentimes these communities also require their residents to pay regular fees to maintain common areas and subsidize amenities.
One of the greatest challenges associated with 55-plus communities is that they do not provide medical or other support services that may be required for residents who are over the age of 80. Therefore, it is highly likely that residents will need to move once again as they continue to advance in age.
Unlike age-restricted developments, independent living retirement communities typically provide their residents with a broader range of assistive services, including housekeeping, dining and meal services and, in some instances, medical care. Of course, residents will likely pay extra for these services. Yet, each individual resident will have his or her own private living unit equipped with safety featured geared toward an aging population, such as grab bars and emergency call buttons. Once individuals are no longer able to perform daily living activities and care for themselves, they may outgrow an independent living facility, and another move may become imminent.
Just as its name implies, assisted living communities provide residents with round-the-clock staff to help them perform daily living activities and provide nursing and medical services. Residents will typically live in their own private units, often without a full kitchen or laundry services. Fees may depend on the level of care provided. It is important to note that the costs of assisted living and nursing home arrangements continue to increase. According to Genworth’s 2017 Cost of Care Survey, the national median monthly cost of living in these facilities is $3,750, an increase of more than 3 percent over the prior year. When a resident requires a higher level of care, a nursing home may be a consideration. According to Genworth, the median daily rate of a nursing home stay is $267, which represents an increase of more than 5 percent over the prior year.
Continuing care communities provide seniors with a full of living arrangements and nursing care options. When an individual is still active and able to live independently, they can reside in their own private home. As their needs change, individuals may move within the community to assisted living and skilled nursing care facilities. To ensure this continuum of care, the communities typically require residents to pay significant deposits that are neither refundable to the residents nor their family members.
As lifespans increase, there is a very real threat that retirees may outlive their savings. One option for building a cushion of cash for future living expenses may be to sell the family home and rent an apartment that is close to needed facilities and services, such as grocery stores and doctors offices. Similarly, there appears to be an emerging trend of co-living options for seniors to rent private or shared living spaces similar to college dorms. The costs vary, depending on location and amenities offered.
While there is no one perfect living arrangement that will apply equally to all seniors, it is important for families to discuss their wants, needs and financial ability to pay for future housing before they enter retirement. Long-term care insurance may help individuals plan for changing circumstances and afford the level of care that they require and desire during their golden years.
About the Author: Brendan T. Hayes is a financial planner with Provenance Wealth Advisors, an Independent Registered Investment advisor affiliated with Berkowitz Pollack Brant Advisors and Accountants and a registered representative with Raymond James Financial Services. He can be reached in the firm’s Boca Raton, Fla., office at (561) 361-2001 or via email at email@example.com.
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Brendan T. Hayes is a registered representative of and offers securities through Raymond James Financial Services, Inc., Member FINRA/SIPC.
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