What separates the home you want to retire in from the home that best suits your retirement needs? Some work and investment.
According to a survey of wealthy investors by financial firm UBS, 89% want to stay their current home well into their retirement. Just 54% consider assisted living an appealing option, 15% would consider moving into their child's home and just 12% would be OK with a nursing home (12%). A survey by insurance company Nationwide, meanwhile, found that 67% of women say they would rather die than live in a nursing home. 73% would like to receive long-term care in their own home, but only 51% think they will.
"The sacrifice women make for their families at the expense of their health and finances does not come cheap," says Shawn Britt, director of long-term care initiatives for the advance consulting group at Nationwide. "Many women spend much of their lives taking care of others, giving up earned income and benefits, which makes planning for long-term care so much more important."
As a survey by senior care site Caring.com made clear, only 53% of people would consider an assisted-living facility for themselves. Of those who rule it out altogether, 41% say they would prefer to live on their own. That option, however, comes with a cost attached. Another Caring.com survey found that four out of 10 family caregivers -- mostly spouses and children -- spend $5,000 or more on caregiving expenses. Those costs include food and clothing (62%) and transportation (60%), followed by medications and other medical costs (44%).
Other options can be even more costly. Among UBS investors, 80% of investors want their spouse to care for them and 67% want a home health aide, while only 27% want a child to care for them. According to long term care insurance provider Genworth, the median cost of homemaker services -- which help with household chores that can no longer be managed alone, including cooking, cleaning and running errands -- is $20 an hour nationwide. That's 2.63% more than it was in 2014, and that figure has jumped 1.61% in each of the last five years. If you have to hire a home health aide for various personal needs that fall just shy of medical care, the median rate charged by a non-Medicare certified, licensed agency is also $20 an hour. Even that's 1.27% more than it was in 2014 after a 1.03% bump in each of the last 5 years.
Adult Day Health Care (ADC) -- which provides social activities and outings, but also may include personal care, transportation, medical management and meals -- clocks in at a median cost of $69 a day. Demand has increased significantly, however, driving up costs 5.94% from 2014 and hiking 2.79% annually since 2011. Demand for those in-home services is only going to increase, as the Census Bureau determined last year that the population of Americans aged 65 and older will grow to greater than 80 million by 2050. Meanwhile, the number of people likely to require long-term care is expected to more than double from 12 million today to 27 million over that time span.
"Even if you're nowhere near retiring, it's important to make a plan," says Curt Vanderzanden, a loan officer with Mortgage Express in Portland, Ore. "When it comes to aging in place, it makes sense to have the fixes complete before you need them."
The National Association of Home Builders maintains a lengthy, running checklist of repairs homeowners can make to keep their house livable. Some are minor adjustments, like upgrading to a front-loading washer and dryer the next time they're due to be replaced. Adding fixtures like adjustable showerheads, lever-style door handles, handrails on both sides of a staircase, lower light switches and higher electrical outlets can all be a great help later in life. However, if you're looking for bigger remodeling projects, increasing the width of doorways to at least 36 inches, adding a step-free exterior entrance or ramp, installing a bathroom on the ground floor (complete with a walk-in shower and low-rise tub), putting in pocket doors where possible and outfitting the kitchen with shallow sinks, multilevel countertops and a bottom-freezer fridge are all wise choices.
Technology is your friend in this regard. Smart bath monitors can turn the water off before a tub overflows, and detection alarms on stoves can prevent potentially fatal accidents. Meanwhile, motion-activated lights, smart doorbells with a video monitor and smart home security systems provide an extra layer of protection for those who can no longer get around too well.
It can take a bit of adjustment to move your main living area to one floor or to place grab bars in the tub and shower, but it's all part of acknowledging certain limitations. Switching your home's exterior to brick or vinyl and replacing fast-growing shrubs or grass with something more low-maintenance just makes less for you to do. Also, the overwhelming number of fixes suggested by the National Association of Home Builders involves simply putting things within reach: pull-down shelving, raised appliances, lowered microwave and cabinets, lever sink handles, push-button switches, etc.
You're planning for a future where you want things to be easier to reach, read, operate and navigate. It may help to have a separate floor or apartment for caregivers, as well as separate space for visiting kids, but just ensuring that you have a home you can comfortably live in for the rest of your life is a huge undertaking.
As is the case with other long-term care costs, it helps to budget for those home improvements now. According to a survey by Genworth, 70% of people over 65 will need long-term care. However, based on a survey of wealthy investors by financial firm UBS Wealth Management, 77% have not set funds aside for future medical expenses, and just 8% have received advice on managing future health care costs.
This is troubling, as UBS found that the greatest fear among wealthy investors as they age is being a burden to children (42%). That ranks higher than fears of surviving on life support (34%) or living in a nursing home (15%). It's going to be difficult to allay those fears when just 39% of investors have talked with children about who will take care of them in old age. Worse, only 50% have factored health care costs into their overall financial plan, and only 23% have saved for their future care.
"Maintaining self reliance is important to the vast majority of investors," said Paula Polito, Client Strategy Officer, UBS Wealth Management Americas. "Having a plan in place for long-term care before they actually need it will help them avoid burdening their children."